In a high-profile legal battle, Amazon and the U.S. government are currently engaged in oral arguments in a Seattle courtroom regarding the company’s Prime subscription service. Central to the case is the accusation from the Federal Trade Commission (FTC) that Amazon has misled consumers into signing up for Prime memberships through manipulative design practices, commonly referred to as “dark patterns.” The government contends that the company deliberately made it difficult for users to cancel their subscriptions.
This lawsuit represents one of the largest federal cases against Amazon, with a jury set to determine whether the company has violated consumer-protection and competition laws. The trial is expected to last nearly a month.
Prime membership, which costs $139 annually or $14.99 monthly, reportedly boasted over 200 million subscribers worldwide as of 2021, the last time Amazon disclosed such figures. The current lawsuit is viewed as a precursor to a more extensive indictment against Amazon, accusing the company of operating as a monopoly. A second trial regarding this matter is scheduled for early 2027, under the same judge overseeing the current case.
The FTC’s complaint alleges that millions of individuals unintentionally enrolled in Prime due to deceptive design choices employed by Amazon. One key example highlighted in the suit is a prominent yellow button labeled “Get FREE Two-Day Shipping,” which enables quick enrollment without sufficient information about the associated recurring membership fees. Conversely, a much smaller link providing an option to opt out is designed to be easily overlooked.
Furthermore, the lawsuit details the convoluted process required to cancel a Prime membership, described as a “four-page, six-click, fifteen-option” endeavor. Internally, Amazon employees have labeled this complicated process the “Iliad Flow,” referencing the lengthy narrative of the ancient Greek epic. According to the FTC, this complexity has resulted in consumers being “accidentally enrolled” in Prime without their informed consent, a situation that Amazon is accused of being aware of but choosing not to rectify due to concerns that reducing confusion could lead to a decrease in subscribers.
In its defense, Amazon argues that the popularity of its Prime membership program is due to its perceived benefits rather than any deceptive tactics. The company asserts that its design practices align with industry standards, stating that occasional customer misunderstandings are common in popular programs like Prime. Amazon claims that any evidence of confusion among a small percentage of users does not demonstrate legal violations.
Legal scholars, such as Andrea Matwyshyn from Pennsylvania State University, emphasize that the broad language of consumer protection laws allows for flexibility in regulation as new technologies and practices emerge. The crux of the issue lies in determining when design choices cross the line into practices that could mislead consumers.
Judge John Chun, overseeing the case, has previously reprimanded Amazon lawyers for their handling of evidence in the lawsuit. The FTC accused the company of concealing damaging documents by improperly marking them as privileged. Following this, Amazon reviewed its privilege claims, ultimately producing nearly 70,000 documents to the FTC right before the discovery phase ended.
Judge Chun has sided with the FTC on multiple procedural matters, including denying Amazon’s motion to dismiss the case. This investigation into Amazon began during the Trump administration and has continued into the Biden administration under the leadership of FTC Chair Lina Khan, known for her critical stance on big tech companies.
As the trial unfolds, the implications for Amazon and potentially the broader subscription model industry remain to be seen, highlighting a significant intersection of technology, consumer rights, and regulatory scrutiny.
