Arguments are set to get underway Tuesday in a case brought by the Federal Trade Commission against Amazon, focusing on how the retailer convinced shoppers to sign up for Amazon Prime and the obstacles it allegedly created to exit that loyalty program.
The FTC alleges Amazon tricked nearly 40 million customers into signing up for Prime, then made it challenging to cancel their subscriptions—a violation, the agency says, of consumer protection laws. The FTC is seeking refunds for consumers, civil penalties, and an order that would require Amazon to make it easy to cancel a Prime subscription. The case will be heard in federal court in Seattle, with opening arguments expected to begin Tuesday.
Amazon, in a statement to Fast Company, denied all of the claims. “The bottom line is that neither Amazon nor the individual defendants did anything wrong—we remain confident that the facts will show these executives acted properly and we always put customers first,” a company spokesperson said.
The lawsuit against Amazon was originally filed two years ago. And while its focus isn’t as sweeping as the looming antitrust trial, which is moving forward following the retailer’s recent failed attempt to have the case dismissed, it does zero in on a popular program used by millions of people.
While Amazon does not regularly report Prime membership data, it’s subscriber numbers are estimated to be north of 200 million. Last year, the cost of those subscriptions brought in $4 million to the company. (Prime customers also tend to buy more than non-Prime ones.)
A Prime subscription currently costs $14.99 per month, or $139 annually.
“Amazon was aware for years that it was taking consumers’ money without their consent, yet chose to do nothing about it,” the FTC wrote in a recent court filing.
A “labyrinthine” process
The FTC alleges that Amazon created a “labyrinthine” cancellation process designed to deter customers from finishing the act of cancellation. The agency says this process was referred to internally as “Iliad Flow,” and claims that customers wishing to cancel their Prime memberships were required to “navigate a four-page, six-click, fifteen-option cancellation process.” Warnings on missing deals and discounts were also included to discourage customers, according to the agency.
Following the FTC’s filing of the suit, Amazon has changed its cancellation policies. A stand-alone cancellation page lets members see the options available to them on pausing or ending their membership. The FTC suit is continuing, however, with a focus on customers who signed up before those changes.
The jury trial is expected to last for approximately a month. Should Amazon be found in violation of the law, the judge will decide what the retailer will pay in damages.
That same judge, John Chun, last week ruled that Amazon violated consumer-protection laws through its practice of taking the billing information of Prime members before it disclosed the terms of the membership. Chun also said Amazon executives Neil Lindsay and Jamil Ghani would be individually liable if the FTC wins the trial, given their high level of involvement with the cancellation practices.
Beyond Amazon, the FTC has pending cases against LA Fitness and Uber for similar subscription and cancellation practices. (Both have denied the charges.) Match Group settled a similar case earlier this year for $14 million.
As for the antitrust case against Amazon by the FTC and several state attorneys general, that’s currently slated to go to trial in 2027.