FTC sues Amazon over Prime subscription
On Wednesday, Amazon announced this year’s shopping event, Prime Days 2023. However, the announcement was overshadowed by the news that lawsuits had been filed against e-commerce.
How among other things CNBC writes, the US consumer protection agency FTC has sued Amazon for its handling of users with its Prime subscription. The lawsuit was filed in Seattle, Washington District Court.
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It follows an investigation into the Prime program that the FTC launched in March 2021. The lawsuit accuses Amazon of intentionally enticing millions of consumers to pay for the Prime program. An attempt to terminate the contract, on the other hand, is “sabotaged”.
Specifically, Amazon is said to have used “manipulative, intrusive or misleading designs of its user interface” with which users would be persuaded to register with Prime – without actually wanting to. Not only did this frustrate Prime subscribers, it also cost them a lot of money, according to FTC Chair Lina Khan.
In Germany, a Prime subscription costs EUR 8.99 per month or EUR 89.90 per year. As a Prime member, you get free shipping on Amazon, you can use the Prime Video and Music streaming services, and you can read a selection of e-books for free.
The FTC considers it proven that Amazon makes it difficult for users without a Prime subscription to shop on its e-commerce platform. In addition, a button that is confusing for some is used, which does not make it clear that a Prime subscription is also being concluded.
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In order to make it more difficult for subscribers to cancel, Amazon is said to have taken special measures in terms of navigation and design. This process is internally called “Iliad” (“Iliad”) and refers to Homer’s work of the same name about the Trojan War.
At the same time, Amazon officials have refused or been slow in implementing requested changes to these practices because of the negative impact on business results, the FTC said. Therefore, the authority has now filed a lawsuit.
The Prime program, which started in 2005, has developed into one of the largest subscription services in the world with 200 million members over the past few years. According to the FTC, Amazon is now making $25 billion a year from Prime subscriptions.
No wonder the lawsuit against Amazon’s Prime practices was not well received by investors. The shares of the e-commerce group fell by almost two percent at times on Wednesday morning, but recovered somewhat during the course of the day.
