Prime subscription: Amazon to pay $2.5bn to settle FTC lawsuit

Image

Amazon agreed Thursday to pay $2.5 billion to settle allegations from a U.S. regulator that it used deceptive practices to enrol consumers in Amazon Prime and made it difficult to cancel subscriptions.

The Federal Trade Commission’s lawsuit, filed in federal court in Seattle, alleged that Amazon knowingly tricked consumers into signing up for the $139-per-year Prime service during checkouts.

The settlement represents one of the FTC’s largest financial recoveries in a consumer protection case.

The case centres on two main allegations: that Amazon enrolled customers without clear consent through confusing checkout processes, and that it created a deliberately complex cancellation system internally nicknamed “Iliad” — after Homer’s epic about the long, arduous Trojan War.

The FTC alleged that Amazon’s checkout process forced customers to navigate confusing interfaces where declining Prime membership required finding small, inconspicuous links — while signing up for the service used prominent buttons.

Crucial information about Prime’s price and automatic renewal was often hidden or disclosed in fine print, the FTC also alleged. Punch