Amazon and the Federal Trade Commission are squaring off in a long-awaited trial over whether the company duped users into paying for Prime memberships.
The lawsuit, filed by the FTC in June 2023 under the Biden administration, alleges that Amazon deceived tens of millions of customers into signing up for its Prime subscription program and sabotaged their attempts to cancel it. Amazon has denied any wrongdoing.
The trial is being held in a federal court in Seattle, Amazon's backyard. Jury selection began Monday and opening arguments are slated for Tuesday, with the trial expected to last about a month.
Launched in 2005, Amazon's Prime program has grown to become one of the most popular subscription services in the world, with more than 200 million members globally, and it has generated billions of dollars for the company. Membership costs $139 a year and includes perks like free shipping and access to streaming content. Data has shown that Prime members spend more and shop more often than non-Prime members.
Amazon founder and executive chairman Jeff Bezos famously said the company wanted Prime "to be such a good value, you'd be irresponsible not to be a member."
Regulators argue that Amazon broke competition and consumer protection laws by tricking customers into subscribing to Prime. They pointed to examples like a button on its site that instructed users to complete their transaction and did not clearly state they were also agreeing to join Prime for a recurring subscription.
"Millions of consumers accidentally enrolled in Prime without knowledge or consent, but Amazon refused to fix this known problem, described internally by employees as an 'unspoken cancer' because clarity adjustments would lead to a drop in subscribers," the agency wrote in a court filing last week.
The FTC says that the cancellation process is equally confusing, requiring users to navigate four webpages and choose from 15 options — a "labyrinthian mechanism" that the company referred to internally as "Iliad," referencing Homer's epic poem about the Trojan War.
Amazon has argued that the Prime sign up and cancellation processes are "clear and simple," adding that the company has "always been transparent about Prime's terms."
"Occasional customer frustrations and mistakes are inevitable — especially for a program as popular as Amazon Prime," the company wrote in a recent court filing. "Evidence that a small percentage of customers misunderstood Prime enrollment or cancellation does not prove that Amazon violated the law."