FTC Sues Amazon, Claiming ‘Deceptive’ Prime Sign-Up and Cancellation Process

Monday, 26 June 2023

Annie Palmer, reporting for CNBC last week:

The Federal Trade Commission on Wednesday sued Amazon, alleging the nation’s dominant online retailer intentionally duped millions of consumers into signing up for its mainstay Prime program and “sabotaged” their attempts to cancel.

The agency claims Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act by using so-called dark patterns, or deceptive design tactics meant to steer users toward a specific choice, to push consumers to enroll in Prime without their consent.

Some links:

• The FTC’s own announcement, which contains a link to the very heavily redacted complaint. (Apparently the redactions are at Amazon’s behest, not the FTC’s, but they render at least half of it meaningless.)
• A Twitter thread from FTC commissioner Lina Khan summarizing the case.
• The Wall Street Journal’s story on the lawsuit, which — shocker, I know — somehow doesn’t mention that The Wall Street Journal itself requires subscribers to make a phone call to cancel a digital subscription to the Journal.
• “Amazon’s Antitrust Paradox” — Khan’s seminal 2017 paper published in The Yale Law Journal.

I find the FTC’s case against Amazon to be weak sauce at best, and bordering on frivolous. Their argument that Amazon has made it difficult to cancel a Prime subscription is just wrong. Yes, it’s a few more clicks than it takes to sign up for Prime, but I don’t think any of those steps are arduous or unnecessary or unfair or confusing. And in the context of Amazon’s entire website — infamously sprawling — it’s really rather easy to find.

The FTC might have a better case that Amazon has used deceptive dark patterns to get people to sign up for Prime, but I don’t find their case compelling. (Note, however, my above remark that their complaint is heavily redacted. Perhaps some of the redactions cover essential evidence.) But it fails the sniff test in one regard: I’ve never once heard of anyone complaining that they were tricked into a Prime membership that they didn’t knowingly sign up for. I’ve seen people complaining about how hard it is to cancel all sorts of other subscriptions and memberships. Cable TV providers like Comcast make it really hard to cut the cord. Gyms are notorious for requiring you to cancel a membership in person. And The New York Times only recently began allowing subscribers to cancel over the web, rather than calling and talking to a human whose job it is to talk you out of cancelling. Like I mentioned above, The Wall Street Journal still requires this. That should be illegal.

But Amazon Prime? I’ve never seen anyone complain about this.

It’s way easier to cancel a Prime membership than most subscriptions. And most of the steps the FTC delineates are reasonable “Are you sure?” precautions. It’s like complaining that it takes a few more steps to empty the Trash in MacOS (or Recycle Bin on Windows) than it does to create a new file or folder — destructive actions should take a few extra steps.

I’d be all in favor of the FTC pursuing and enforcing laws that require all subscription services to have clear, discoverable cancellation options online. In fact, it seems ridiculous that the FTC hasn’t already done this. But singling out Amazon only makes sense insofar as that Lina Khan made a name for herself as a critic of the company.

See also: Ben Thompson, today at Stratechery:

This, to my mind, is the chief reason why this complaint rubs me the wrong way: even if there is validity to the FTC’s complaints (more on this in a moment), the overall thrust of the Prime value proposition seems overwhelmingly positive for consumers; surely there are plenty of other products and subscriptions that aren’t just bad for consumers on the edges but also in their overall value proposition and reason for existing.