Amazon Faces US Trial Over Alleged Prime Subscription Practices

Amazon is set to appear in federal court on Monday in a US government lawsuit accusing the e-commerce giant of employing deceptive methods to enrol millions of customers in its Prime subscription service and making cancellation unduly difficult.

The Federal Trade Commission (FTC) filed the complaint in June 2023, alleging that Amazon deliberately used designs known as “dark patterns” to mislead consumers into signing up for the $139-per-year Prime service during the checkout process.

The lawsuit centres on two primary claims:

1. Non-consensual enrolment: Customers were signed up for Prime through confusing checkout processes that obscured consent.
2. Complicated cancellation process: Amazon created an internally nicknamed system, “Iliad”, designed to make unsubscribing arduous — named after Homer’s epic depicting the long and difficult Trojan War.

The case will be heard in a federal court in Seattle by Judge John Chun, who is also overseeing a separate FTC case accusing Amazon of running an illegal monopoly, scheduled for trial in 2027.

These lawsuits are part of a broader bipartisan effort to curb the power of major US tech companies after years of perceived regulatory inaction.

Court documents state that Amazon was aware of widespread non-consensual enrolments but resisted changes that would reduce these sign-ups due to their negative impact on revenue.

The FTC further alleges that:

• Checkout interfaces required customers to find small, inconspicuous links to decline Prime, while prominent buttons encouraged enrolment.
• Key information about Prime’s pricing and automatic renewal was often hidden or displayed in fine print.
• The cancellation process was deliberately complex, with multiple pages, clicks, and options required to opt out.

“For years, Amazon has knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service,” the complaint states.

Prime has become central to Amazon’s business model, with subscribers spending significantly more than non-members.

The FTC is seeking:

• Penalties and monetary relief
• Permanent injunctions requiring Amazon to change its practices

The case relies in part on ROSCA (Restore Online Shoppers’ Confidence Act), legislation from 2010 that prohibits charging consumers without:

• Clear disclosure of terms
• Express consent
• Easy cancellation mechanisms

The FTC argues that Amazon violated ROSCA by failing to clearly disclose Prime terms before collecting payment and not obtaining genuine informed consent.

Amazon plans to argue that:

• ROSCA and other regulations do not specifically prohibit the practices under scrutiny.
• The FTC is overextending the law.
• Improvements have already been made to Prime enrolment and cancellation processes, rendering the allegations outdated.

Trial Expectations

• The jury trial is expected to last approximately four weeks.
• Evidence will rely heavily on internal Amazon communications, documents, and testimony from executives and expert witnesses.

If the FTC prevails, Amazon could face:

• Substantial financial penalties
• Mandatory overhaul of subscription practices under court supervision

The outcome of this trial may have far-reaching implications for subscription-based services across the digital marketplace, signalling how aggressively regulatory bodies are willing to act against major tech corporations.