August 17, 2022

  • The agency is deepening its investigation into the Amazon Prime registration and cancellation process.
  • The FTC reached out to employees and sent subpoenas and requested a civil investigation.
  • Insider reported in March that Amazon was aware of customer complaints, but decided not to use clearer language in part because of slower growth.

The Federal Trade Commission has deepened an investigation into the Amazon Prime subscription service and whether the e-commerce giant intentionally deceives consumers into signing up for the membership program.

The probe focuses on Amazon’s use of ambiguous language and design in Prime’s registration and cancellation process, known as “dark patterns.” Internal documents released by Insider in March showed that Amazon had worried for years about customers feeling tricked into signing up for Prime, yet the company chose not to use clearer language because it didn’t want to slow the growth of its subscription business.

As part of the investigation, the Federal Trade Commission recently reached out to current and former Amazon employees, and sent letters of subpoena in some cases, according to people familiar with the matter. These people requested anonymity because they are not authorized to speak publicly about the investigation.

One of the subpoenas sent out in recent months has been reviewed by Insider. It stated that the FTC submitted a civil investigation request to Amazon in March 2021. A CID is a legal document enforceable in court and seeks documents or other information related to the FTC investigation. The agency sends criminal investigation identifiers to obtain information from companies it believes have broken the law, according to the FTC’s website.

In April, the Federal Trade Commission (FTC) sent more correspondence on the issue to an Amazon attorney, according to the letter, which cited an Insider story from March 2022.

The Federal Trade Commission usually initiates a lawsuit against Amazon in a case like this, according to people familiar with the matter. The agency can then drop the case or reach a settlement based on the evidence it gathers. Amazon can also slow down the process by petitioning the Federal Trade Commission to cancel the recall requests.

An FTC spokesperson declined to comment. “We constantly listen to customer feedback and look for ways to improve customer experience,” an Amazon representative said in a statement.

“Customers love Prime and by design we make it clear and simple for customers to sign up or cancel their Prime membership,” the Amazon spokesperson added.

The Prime membership program, known for free delivery and streaming video content, has enjoyed unprecedented growth to become one of the most popular subscription programs in the world, with more than 200 million members as of last year. While Prime has generated billions of dollars for Amazon, it has also led to multiple lawsuits from shoppers who say they were duped into signing up for the membership program.

The Federal Trade Commission (FTC) has begun looking into this issue in recent years, prompting Amazon’s attorneys to hold private meetings with members of the Prime team as recently as 2021, Insider previously reported.

The investigation is led by the Federal Trade Commission’s Office of Consumer Protection, which is separate from the agency’s office Antitrust probe against Amazon. Earlier this year, Federal Trade Commission Chair Lina Khan Publicly issued general warnings About dark modes and hard-to-cance subscriptions. In October, the Federal Trade Commission Published guidelines A warning about “publishing illegal dark patterns that deceive or entrap consumers in subscription services.”

Amazon faced similar accusations in Europe, and last month, Agreed to simplify the process for canceling Prime in the region. The change came on the heels of a complaint from the European Consumer Organization, the Norwegian Consumer Council and the Transatlantic Consumer Dialogue, which argued that Amazon had deliberately made it difficult to cancel the PM’s membership with a plethora of obstacles and confusing wording.

Do you work at Amazon? Got a tip?

Contact reporter Eugene Kim via encrypted messaging apps Signal, Telegram (+ 1-650-942-3061), or email ([email protected]).

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