Amazon is sued by FTC over 'deceptive' practices with Prime sign-ups and cancellations (updated)
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The Federal Trade Commission filed a lawsuit against Amazon (NASDAQ:AMZN) on Wednesday. The regulator alleged the e-commerce giant intentionally used deceptive practices to get consumers to sign up for the Prime program and also sabotaged some attempts to cancel the service.
The agency claims Amazon (AMZN) violated both the FTC Act and the Restore Online Shoppersâ Confidence Act through the use dark patterns, which are considered deceptive design tactics meant to steer users toward a specific choice without their consent.
"Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money," noted FTC Chair Lina Khan in a statement.
The FTC has fired off three separate regulatory or legal actions against Amazon (AMZN) in the last six weeks.
Earlier in the day, Amazon (AMZN) announced the timing of its annual Prime Day shopping event, which is one of its biggest drivers of Prime sign-ups.
Shares of Amazon (AMZN) were down 1.05% at 10:21 a.m. on Wednesday. The stock sits comfortably ahead of its 50-day, 100-day, and 200-day moving averages.
Amazon statement: "The FTCâs claims are false on the facts and the law. The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership. As with all our products and services, we continually listen to customer feedback and look for ways to improve the customer experience, and we look forward to the facts becoming clear as this case plays out. We also find it concerning that the FTC announced this lawsuit without notice to us, in the midst of our discussions with FTC staff members to ensure they understand the facts, context, and legal issues, and before we were able to have a dialog with the Commissioners themselves before they filed a lawsuit. While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court."
Updated to add Amazon's statement
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