The Federal Trade Commission is taking Amazon to court this week over the tech giant’s moneymaker Prime subscription program.
In a trial set to last for the next month, FTC is claiming that Amazon tricked millions of customers into signing up for a Prime membership and then made it very tough to cancel said 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 FTC wrote in a court filing from earlier this month.
“Similarly, Prime’s cancellation flow, known internally as “Iliad,” is a labyrinthian mechanism that Defendants know deters consumers from cancelling or misleads consumers into believing they successfully cancelled Prime when they in fact did not,” the FTC said.
The lawsuit was filed two years ago under Biden-era FTC, then led by big tech hawk Lina Khan. It is going to be Amazon’s first major showdown with the FTC, but there is a second one already on the horizon. The FTC separately delivered its first set of antitrust charges to Amazon two years ago, and the trial for that is set to start in early 2027.
Prime is a huge moneymaker for Amazon. The tech giant made more than $44 billion just from subscriptions last year. That number includes other subscription services under Amazon, like audiobooks and music streaming, but Prime is the leading source. On top of the billions of dollars in subscription revenue, Prime users also generate a lot of money for Amazon in online purchases.
Details of the case
FTC argues that Amazon buried price and subscription renewal terms in the fine print when users sign up for a free trial, and includes confusing language that tricks people into accidentally signing up for an Amazon Prime trial. The confusing language allegedly includes tempting users with free shipping when they check out, not sufficiently clarifying that clicking that link would sign them up for an Amazon free trial that automatically renews after 30 days.
Then, when users want to cancel their Prime subscriptions, Amazon makes them go through a multi-step process allegedly designed to convince them not to cancel. The process is allegedly referred to internally as “the Iliad,” named after the ancient Greek epic depicting the decade-long Trojan War, famous for its grand deception with the Trojan Horse. Very on the nose.
I went through to see this cancellation process myself, and it is long. It makes you jump through many pages, tempting you with exclusive offers and TV shows you can only watch on Prime Video.
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