Arizona Sues Amazon Over 'Manipulative' Tactics, 'Buy Box' Algorithm

Arizona this week sued Amazon for allegedly thwarting Prime members' attempts to cancel their subscriptions, and for allegedly using a “biased algorithm” to determine what product to place in its Buy Box.

Amazon's “layered and confusing” Prime cancellation procedures rely on “dark patterns” that dupe consumers, Arizona Attorney General Kris Mayes alleges in a complaint brought in Maricopa County Superior Court.

Mayes alleges that until recently, Amazon required Prime users to navigate through multiple pages that offered “confusing or manipulative” messages. For instance, Amazon's “end membership” button allegedly warned consumers that if they canceled their subscriptions, they would lose access to Prime benefits.

“This warning is an example of a dark pattern known as confirm-shaming, which Amazon’s cancellation process also frequently relied on,” the complaint alleges. “This dark pattern exploits a cognitive bias of loss aversion, where the disadvantages of leaving a service appear more prominent than the advantages, so that individuals have a strong tendency to remain at the status quo.”



Mayes adds that design features like "brightly colored buttons offering alternatives to cancelling" and "whimsical graphics to depict the value of remaining with Prime" aimed to "confuse and distract" people from ending their subscriptions.

The complaint claims that those alleged tactics amount to an unfair business practice.

The allegations are similar to ones made by the Federal Trade Commission, which sued Amazon last year over the Prime cancellation procedures.

The Interactive Advertising Bureau weighed in on Amazon's side in that matter, arguing that the FTC was attempting to regulate truthful advertising statements.

“Efforts to make certain that someone want to unsubscribe before actually unsubscribing them are common,” the IAB wrote in a friend-of-the-court brief filed with U.S. District Court Judge John Chun in Seattle. That matter remains pending.

Mayes alleged in a separate complaint that Arizona violated consumer protection and antitrust laws with its Buy Box, which offers consumers the option to immediately purchase items, or to add items to a shopping cart.

Amazon's algorithm allegedly is “biased in favor of first-party retail offers or offers from third-party sellers who participate in Fulfillment By Amazon,” that complaint alleges.

Mayes adds that the algorithm “deceptively favors Amazon’s own profits over consumer well-being” because the products in the Buy Box can be more expensive than the ones Amazon doesn't place in the Buy Box.

“The result is that consumers routinely overpay for items that are available at lower prices from other sellers on Amazon -- not because consumers don’t care about price, or because they’re making informed purchasing decisions, but because Amazon has chosen to display the offers for which it will earn the highest fees,” Mayes alleges.

The attorney general also claims that Amazon drives up prices for consumers by allegedly penalizing marketplace vendors that offer lower prices on other platforms.

An Amazon spokesperson said the company was “ surprised and disappointed by these cases,” adding that Mayes brought suit “without reviewing a single document from Amazon, resulting in a fundamental misunderstanding and mischaracterization of how Amazon’s businesses work.” 

The spokesperson added that Prime's enrollment and cancellation processes are “clear and simple by design,” and that consumers can cancel memberships “with a few clicks from the home page.”

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