The Federal Trade Commission (FTC) Finally takes action against Amazon's tricky "Amazon Prime" program

Posted by Clyde Hutchins | Aug 02, 2023 | 0 Comments

The FTC has taken action against Amazon regarding its "Amazon Prime" program.

Most Americans are familiar with Amazon, having used it at one time or another. Many Americans have enrolled into "Amazon Prime." Amazon Prime is a membership program that provides many benefits, including, but not limited to fast, free delivery, TV, movies, sports, music, prescription savings, games, photo storage, and etc. Currently, it costs $14.99 a month or $139 a year.

Amazon's huge size impacts a majority of Americans. Here are some recent mind boggling statistics compiled recently:

  • 31% of U.S. adults now spend between $50-$100 per month on Amazon purchases.
  • Amazon's share of all e-commerce sales in the U.S. hit a whopping 56.7% in 2021.
  • There are over 12 million products sold on Amazon.
  • Around 70% of American adults are Amazon Prime members (148.6 million people).
  • 31% of U.S. adults now spend between $50-$100 per month on Amazon purchases.
  • Amazon's total net sales revenue reached $514 billion in 2022.

I am not an Amazon Prime member, since I rarely have need of any of its benefits. On the infrequent occasions I buy through Amazon, I have noticed that in the check out process, I am sort of pushed into signing up for Amazon Prime and if I am not careful, I could easily accidentally sign up for the service. Well, it seems that the FTC has noticed this sort of "pushing" too as many people fall for it.

The FTC filed a complaint this summer against Amazon. The FTC's concerns is that for many years, Amazon has attempted to enroll consumers into its Amazon Prime program without their consent while knowingly making it difficult for consumers to cancel their subscriptions. In paragraph 2 of its complaint, the FTC states, "For years, Defendant, Inc. (“Amazon”) has knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service (“Nonconsensual Enrollees” or “Nonconsensual Enrollment”). Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as “dark patterns” to trick consumers into enrolling in automatically-renewing Prime subscriptions." The FTC calls dark patterns, "manipulative design elements that trick users into making decisions they would not otherwise have made." Further into the complaint, when addressing Amazon's cancelation program, the FTC states, "the primary purpose of the Prime cancellation process was not to enable subscribers to cancel, but rather to thwart them." 

The FTC contends that Amazon violated the FTC act by, charging consumers without their express informed consent. (Count I). The FTC also contends that Amazon violated the Restore Online Shoppers' Confidence Act by (a) failing to clearly and conspicuously disclose all material terms of the transaction, including the price of Prime, its auto-renewal provision, and cancellation requirements before obtaining billing information (Count II), (b) failing to obtain the consumer's consent before charging for the Prime membership (Count III), and (c) failing to provide simple mechanisms for a consumer to stop recurring charges. (Count IV) The FTC hopes to cure these alleged violations through the litigation. 

I am not surprised that the FTC is going after Amazon for the way it, in my opinion, surreptitiously forces people to become members of Amazon Prime. But I am surprised that it took this long for the FTC to focus on this glaring problem that everyone has been noticing for years. 

I wish the FTC the best of luck with this case.

About the Author

Clyde Hutchins

Clyde Hutchins is the founder of Harmony Law. Mr. Hutchins started his legal career in Cheyenne, Wyoming as a law clerk for the district court judges. Mr. Hutchins then entered private practice with a Wyoming based litigation and business law firm. Later, Mr. Hutchins went to Alaska, where he was the chief litigator for a firm that engaged in bond law, corporate law, securities law, and municipal law. The State of Wyoming hired Mr. Hutchins from Alaska to represent the State of Wyoming in the national tobacco arbitration and act as its tobacco settlement attorney. While in that position, as a hobby, he developed an enforcement unit for consumer protection for Wyoming residents. Mr. Hutchins moved to Colorado in 2016 and founded Harmony Law, LLC. Harmony Law is primarily engaged in civil litigation. It is also a general practice firm in the areas of business law, estate planning, consumer law and family law. Harmony Law is active in all state and federal courts throughout Wyoming and Colorado.


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