• by Wendy Davis , 5 hours ago

Amazon knows that "millions" of people who enrolled in Amazon Prime did so accidentally, and that the cancellation process involves a "labyrinthian mechanism" that thwarts subscribers' attempts to end their subscriptions, the Federal Trade Commission says in court papers filed Monday.

"Millions of consumers accidentally enrolled in Prime without knowledge or consent, but Amazon refused to fix this known problem, described internally by employees as an 'unspoken cancer,'" the FTC argues in a brief submitted to U.S. District Court Judge John Chun in Seattle.

Amazon counters in its own brief, also filed Monday, that it "has always been transparent about Prime’s terms" and "offers straightforward ways to end a Prime membership."

The new papers come in advance of a trial slated to start next week, when the FTC will attempt to prove that Amazon used "dark patterns" to dupe people into signing up for Prime subscriptions (which currently cost $139 a year), and to hinder cancellations.

The legal battle dates to June 2023, when the FTC sued Amazon for allegedly using "dark patterns" to trick consumers. The agency claimed in its complaint that Amazon violated the Restore Online Shoppers Confidence Act -- a federal law that requires companies to disclose all terms of recurring subscriptions in advance, and offer simple cancellation mechanisms.

The allegations in the complaint largely focus on design choices. For instance, the agency alleged that Amazon's interface required shoppers to say whether they will enroll in Prime before completing a purchase. The enrollment page said Prime subscribers would receive benefits like free shipping; the page also disclosed that subscriptions would continue until cancelled, but in small print, according to the agency.

Though Amazon offered shoppers the ability to make a purchase without signing up for Prime, that choice was “less prominent” than the enrollment option, the FTC said in its complaint. The agency added that Amazon knew since at least 2018 that some people couldn't find the link to decline enrollment.

The FTC also asserted that Amazon "knowingly complicated the cancellation process.”

“Fittingly, Amazon named that process 'Iliad,' which refers to Homer’s epic about the long, arduous Trojan War,” the agency wrote in its complaint, adding that the company failed to implement changes that would have simplified Iliad.

Amazon revised its cancellation procedures shortly before the complaint was filed, but the FTC alleged that the process “still contains problematic elements.”

The FTC told Chun this week that it plans to prove Amazon "failed to clearly and conspicuously disclose all material terms for Prime subscriptions before obtaining consumers’ billing information."

Among other examples, the FTC points to a page referred to in court papers as Amazon's "Universal Prime Decision Page," which has a button consumers can click for free same-day delivery.

"A consumer who clicked on 'Get FREE Same-Day Delivery' will be enrolled in Prime, even if the customer does not complete their product purchase," the FTC writes.

The FTC adds that in some circumstances, Amazon buried crucial terms in fine print.

The agency also says Amazon's internal surveys show that "many" Prime didn't realize they had enrolled in the service.

The FTC adds that the cancellation process required consumers to go through numerous steps.

"In order to start the Iliad cancellation flow, consumers need to make at least three clicks to navigate Amazon’s website and find the 'Manage Membership' link on Prime Central -- which was relatively inconspicuous compared to the page’s marketing material," the FTC writes.

"Once a consumer finally found the “End Membership" button, clicking on it did not end their membership. ... Instead, it forced consumers to click through three new pages: the 'Marketing Page,' the 'Offer Page,' and finally, the 'Cancellation Page.'"

For its part, Amazon argues that the Restore Online Shoppers Confidence Act does not mandate "specific font sizes, colors, or a set number of clicks."

The company adds that the federal statute "does not mention, much less define or even provide any guidance as to what a 'dark pattern' might be."

"To this day, the FTC has not identified what it believes Amazon could change about its flows to make them compliant," Amazon writes.

The company also says its internal documents regarding potential customer confusion don't prove that it violated the Restore Online Shoppers Confidence Act.

"Occasional customer frustrations and mistakes are inevitable," Amazon argues. "Evidence that a small percentage of customers misunderstood Prime enrollment or cancellation does not prove that Amazon violated the law."

Soon after the FTC filed suit, the Interactive Advertising Bureau urged Chun to dismiss the case, arguing in a friend-of-the-court brief that the commission was attempting “to regulate and punish truthful statements made in advertising.”

“The FTC’s 'dark patterns' are described ominously in its complaint, but in substance they largely include a handful of benign, ordinary statements made in the course of Amazon marketing the benefits of its Prime membership and 'design elements' chosen by Amazon, such as the use of color to draw a consumer’s attention, to communicate Amazon’s message that Prime is valuable,” the organization wrote.