The Federal Trade Commission sued Amazon on Wednesday, alleging that its Prime sign-up and cancellation screens enrolled millions of people without their consent and made it difficult for them to leave. The complaint puts the retailer’s subscription design under scrutiny using consumer-protection law already in force, while the agency separately considers broader cancellation rules.
Photo © Tony Webster (2018), “Amazon Fulfillment and Trucks Sign – Shipping Center in Shakopee, Minnesota” (photographed in 2017). CC BY 2.0. Resized and responsively cropped. Historical company-identification photograph, not the Prime interface or this lawsuit; no endorsement implied.
Amazon rejected the allegations. In a statement provided to ABC News, the company called the FTC’s claims “false on the facts and the law” and said it makes joining and cancelling Prime clear and simple. It also said the agency announced the lawsuit without notice while discussions with FTC staff were continuing.
The case was filed in the US District Court for the Western District of Washington after a 3–0 commission vote. The FTC is asking for an injunction, civil penalties and monetary and other relief. Those are requests to the court, not penalties already imposed.
The checkout and the exit are separate parts of the case
The FTC alleges that shoppers encountered repeated Prime offers during checkout, sometimes with the option to buy without a membership harder to find. In some cases, it says, a button used to complete a purchase didn’t clearly explain that it also enrolled the shopper in a recurring subscription.
Cancellation is a distinct allegation. The complaint describes an earlier process, called Iliad internally, in which customers had to navigate four pages, six clicks and 15 options. It contrasts that with enrolment in one or two clicks. These are the agency’s descriptions of Amazon’s interfaces, rather than an independent test of the service.
The complaint also identifies a mismatch between devices: it says customers could enrol through the Prime Video application on FireStick and Fire TV but couldn’t cancel through those same technologies. They instead had to use the web cancellation process or contact customer service.
Amazon changed the US cancellation process in or around April, according to the complaint. That matters when interpreting the screenshots and click counts in the filing: the older Iliad sequence shouldn’t be presented as a verified description of every subscriber’s experience today.
The FTC nevertheless alleges that problems remain. It says the revised process still takes five clicks on desktop and six on mobile from Amazon.com, remains difficult to locate and includes information intended to discourage cancellation. Amazon’s response disputes the agency’s overall account and says the company continually uses customer feedback to improve its services.
Existing law, alongside a proposed rule
The legal claims show why this case reaches beyond a dispute about how many buttons a customer must press.
The Restore Online Shoppers’ Confidence Act, enacted in 2010, sets three requirements for internet transactions with a negative-option feature: disclose material terms clearly before obtaining billing information, obtain express informed consent before charging, and provide simple ways to stop recurring charges. A negative option treats a customer’s failure to cancel or reject an offer as acceptance.
The complaint brings a separate ROSCA count for each requirement. It also alleges that charging customers without consent is an unfair practice under the FTC Act. An easier cancellation screen would address only one part of that set of claims; it wouldn’t by itself resolve the allegations about disclosure and consent at sign-up.
Separately, the FTC has proposed expanding its Negative Option Rule. The proposal, published in the Federal Register on April 24, would apply across forms of negative-option marketing and require cancellation to be at least as easy as signing up. The existing rule covers the narrower category of prenotification plans, such as arrangements that send goods unless a customer declines them.
That proposal is still a proposal. The Amazon complaint relies on the FTC Act and ROSCA, rather than treating the proposed cancellation provisions as an enacted rule. In its rulemaking notice, the agency itself notes that ROSCA doesn’t prescribe the specific steps a seller must follow to meet its requirements.
The public complaint contains substantial redactions. It sets out the FTC’s allegations and requested remedies, but doesn’t establish that Amazon violated the law. The court hasn’t ruled on those allegations.
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