FTC Sues Amazon for Tricking Customers with Shady Prime Subscription Practices

The United States Federal Trade Commission (FTC) has sued the e-commerce giant Amazon for allegedly deceiving its customers into signing up for an Amazon Prime account and then making it hard for them to unsubscribe.

FTC takes action against Amazon for enrolling consumers in Amazon Prime without consent and sabotaging their attempts to cancel: https://t.co/RQW33AwfaP /1

— FTC (@FTC) June 21, 2023

Amazon in Hot Water with FTC

In a press statement released by the FTC on Wednesday, the commission said that it had filed a complaint against Amazon blaming it in allegedly duping “millions of consumers into unknowingly enrolling in Amazon Prime”.

In addition, the statement also noted that the company had “knowingly complicated the cancellation process for Prime subscribers”.

“Amazon misled people into signing up for recurring subscriptions without their agreement, frustrating users and costing them a lot of money… These deceptive tactics hurt both consumers and honest businesses. The FTC will keep working hard to protect Americans from ‘dark patterns’ and other unfair or misleading practices in digital markets,” said FTC Chair Lina M. Khan in the release.

This is not the first time that Amazon finds itself in hot water with the FTC. At the end of May 2023, the e-commerce company had agreed to pay $25 million to the FTC and delete inactive child accounts, certain voice recordings and geolocation data.

FTC has been targeting tech companies for a while now. On 13 June the commission sued Microsoft to stop its $69 billion purchase of video game giant Activision Blizzard.

How Did Amazon React?

In an e-mail sent to TechCrunch, Amazon had denied the allegations stating that they were “false on the facts and the law”.

According to the e-commerce giant Prime’s design makes it very simple and easy for customers to both subscribe and unsubscribe from services, stating that the company has never been trying to deceive anyone.

Amazon added that the FTC had not contacted them directly prior to filing the lawsuit, as it should often be done.

The company noted: “While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court”.

Amazon Stock Looks Bullish Despite the FTC Lawsuit

Despite the negative news, Amazon stocks (NASDAQ: AMZN) have been on a bullish run, briefly dropping by 1.17% on Wednesday from $125.60 to about $124.12 the lowest.

In the past 24 hours, however, AMZN had managed to regain Wednesday’s losses and surged by about 4.25% in the past 24 hours to $130.

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