The FTC sued Amazon in federal court in Seattle, alleging that the company has “knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime”.
In a statement, Amazon called the FTC’s claims “false on the facts and the law”.
Amazon has used “manipulative, coercive or deceptive user-interface designs known as `dark patterns’ to trick consumers into enrolling in automatically renewing Prime subscriptions,” the FTC said as it sought civil penalties and a permanent injunction to prevent future violations.
The lawsuit is one of several actions taken by President Joe Biden’s administration intended to rein in the outsized market power of Big Tech firms as it tries to increase competition to protect consumers.
The FTC said Amazon Prime is the world’s largest subscription programme, generating $25 billion in revenue annually. It offers fast, free shipping on millions of items, various discounts and access to movies, music and television series, as well as other benefits.
Prime members in the United States pay $139 per year and drive much of Amazon’s sales volume. Prime is crucial to Amazon’s other businesses, including its streaming service Prime Video and its grocery delivery service.
In its statement, Amazon said: “The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership.”
