- The agency is deepening its investigation into the Amazon Prime sign-up and cancellation process.
- The FTC has contacted staff and issued subpoenas and requests for a civil investigation.
- Insider reported in March that Amazon was aware of customer complaints but decided against explicit language due to slow growth.
The Federal Trade Commission has deepened its investigation into Amazon’s Prime subscription service, looking into whether the e-commerce giant intentionally enticed consumers into signing up for a subscription program.
The investigation focused on Amazon’s use of ambiguous language and designs, commonly known as “dark patterns,” in the Prime signup and cancellation process. Internal documents reported by Insider in March revealed that Amazon had been enticing customers to sign up for Prime for years, and yet the company chose not to use explicit language as it avoided its subscription business. did not want to slow down the development.
As part of the investigation, the FTC recently contacted current and former Amazon employees and, in some cases, issued subpoena letters, according to people familiar with the matter. These individuals asked not to be identified as they are not authorized to speak publicly about the investigation.
One of the subpoena letters sent out in the past few months has been reviewed by an insider. It added that the FTC requested a civil investigation by Amazon in March 2021. A CID is a legal document that can be enforced in a court of law when requesting documents or other information related to an FTC investigation. According to the FTC website, the agency sends CIDs to obtain information from companies it believes may be breaking the law.
In April, the FTC sent further correspondence on the matter to Amazon’s attorneys, the letter said, citing an inside story from March 2022.
Normally, according to people familiar with the matter, the FTC would file a lawsuit against Amazon in such a case. The agency may later drop the case or settle it based on evidence. Amazon could also slow the process by filing a petition with the FTC to overturn the subpoena requests.
An FTC spokesman declined to comment. An Amazon representative said in a statement that “we constantly listen to customer feedback and look for ways to improve the customer experience.”
“Customers love Prime and we make it clear and easy for our customers to enroll or cancel their Prime membership,” said an Amazon spokesman.
The Prime membership program, known for its free delivery and streaming of video content, has experienced phenomenal growth over the past year, becoming one of the most popular membership programs in the world with over 200 million members. While Prime has generated billions of dollars for Amazon, it has also led to numerous lawsuits from buyers who say they were tricked into signing up for the membership program.
The FTC has started looking into the issue in recent years, prompting Amazon’s corporate attorneys to hold private meetings with Prime team members as recently as 2021, the insider previously reported.
The investigation is being led by the FTC’s Consumer Protection Bureau and is separate from the agency’s antitrust investigation into Amazon. Earlier this year, FTC Chair Leena Khan general public warning About dark patterns and subscriptions that are difficult to cancel. In October, the FTC issued a warning against “employing illegal dark patterns or luring consumers into subscription services.”
Amazon faced similar allegations in Europe and last month agreed to simplify its Prime cancellation process in the region. The change comes after complaints from European consumer organizations, the Norwegian Consumer Council and the Transatlantic Consumer Dialogue, who argued that Amazon intentionally made it difficult to cancel Prime membership with a variety of obstacles and confusing terms.
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