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Amazon has agreed to pay $2.5 billion to settle a lawsuit filed by the Federal Trade Commission, which alleged that the company has \u201cknowingly duped\u201d millions of people into enrolling in its Amazon Prime membership program by using what the FTC has described as \u201cdark patterns,\u201d or, "manipulative, coercive, or deceptive user-interface designs.\u201d<\/p>\n
The settlement claimed that Amazon \u201cobtains consumers\u2019 billing information before it discloses all material terms for an Amazon Prime subscription,\u201d and in doing so, was in violation of the Restore Online Shoppers' Confidence Act, which was signed into law in 2010 to prevent the use of deception to prompt or encourage online purchases.<\/p>\n
The $2.5 billion payment includes $1 billion that has to be paid to the FTC, and $1.5 billion that will go directly to consumers who unknowingly signed up for Prime, or tried and failed to cancel their Prime subscriptions due to Amazon\u2019s online interface, between June 23, 2019 and June 23, 2025. Individual consumers can get compensated up to $51 each.<\/p>\n
In a statement released by the FTC on Tuesday, agency chairman Andrew Ferguson said that the settlement \u201cmade history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.\u201d<\/p>\n
\u201cToday, we are putting billions of dollars back into Americans\u2019 pockets, and making sure Amazon never does this again,\u201d Ferguson said.<\/p>\n
Amazon spokesperson Alisa Carroll tells WIRED that there was \u201cno admission of guilt in this settlement by the company or any executives."<\/p>\n
Dark patterns are hardly exclusive to Amazon. The privacy settings of countless websites make it confusing to reject data-sharing and the use of cookies. Many fashion sites claim that an item of interest is dangerously low in stock, even though it\u2019s unclear how true that is. Google has been accused of employing \u201cdark patterns\u201d by making it difficult to tell which search results are organic and which are paid for. Wednesday\u2019s $2.5 billion settlement with Amazon marks a major attempt at paying consumers back for purchases that they made under these conditions.<\/p>\n
It\u2019s unclear exactly how many Americans have Amazon Prime, but in 2021 company founder Jeff Bezos said it had more than 200 million subscribers globally. Carroll, the Amazon spokesperson, tells WIRED that it settled so as not to risk "months or years of appeals."<\/p>\n
\u201cThe settlement largely requires us to maintain the sign-up and cancellation process that has been in place for several years\u2014not to make additional changes,\u201d Carroll says. \u201cWe will of course continue to comply with the law.\u201d<\/p>\n
The terms of the settlement were laid out in a proposed stipulated order signed by the District Court judge on Wednesday.<\/p>\n
According to the terms of the settlement, within 30 days Amazon has to deposit $1.5 billion into a fund that will be used to pay back eligible consumers. The company also has to make two $500 million payments to the FTC; the first has to be paid within 14 days, and the second has to be paid within 18 months.<\/p>\n
In the six-year time frame established in the settlement, anyone who \u201cunsuccessfully attempted\u201d to cancel their Prime subscription online is eligible to get paid up to $51 from Amazon. People who signed up for Prime during that same period can also get up to $51 if they signed up through a \u201cchallenged enrollment flow\u201d\u2014a page with a confusing interface that may lead to people inadvertently making a purchase. Previous court filings established that in some cases, some users may have selected \u201ctwo-day shipping\u201d on an item and not realized that, in doing so, they were also signing up for Amazon Prime.<\/p>\n
An FTC spokesperson tells WIRED that automatic payments will go out to some customers within 90 days.<\/p>\n
\u201cThe rest of eligible consumers will receive a notification from Amazon, and will have the opportunity to submit a simple claim form,\u201d the FTC says. \u201cAmazon is required to post information about this to Amazon.com and the app. The settlement also requires Amazon to have an independent third party who will monitor their compliance with these claims.\u201d<\/p>\n
The court filing says that Amazon is also \u201cpermanently\u201d barred from structuring Prime sign-ups with a confusing \u201cnegative option feature\u201d where a customer is assumed to be making a purchase unless they actively refuse it.<\/p>\n
For example, the filing says, a button that reads \u201cNo thanks, I don\u2019t want free shipping\u201d does not clearly indicate that a customer will be signed up for Prime unless they click it. Amazon also has to make it obvious when a person is choosing to sign up for Prime, and include language like \u201cJoin Prime\u201d in its user interface. Similarly, Amazon has to clearly communicate when a Prime subscription is subject to auto-renewals by using words like \u201crenew.\u201d<\/p>\n
The initial complaint, which was filed by the FTC in June 2023, alleged that while Amazon had improved its process for canceling Prime memberships, the company had spent years knowingly complicating the cancellation process.<\/p>\n
An attachment on a May 7 court filing includes an email chain with Amazon employees from December 2020, which was described as \u201cprivileged and confidential\u201d in the subject line. In the email, a manager of Prime content and marketing paraphrased key points that came up in a recent \u201cUS prime performance meeting.\u201d<\/p>\n
\u201cSubscription is driving a bit of a shady world,\u201d reads one paraphrased quote, attributed to an unnamed person at the meeting.<\/p>\n
\u201cWe should lean away from experimenting with sign-up clarity, and focus more on driving overall members and increasing confirmation that you are prime,\u201d reads a different paraphrased quote from another person at the meeting, included in the same attachment.<\/p>\n
A different attachment shows that Amazon was aware that customers were frustrated. A company slide presentation dated September 17, 2017, focused specifically on customer service complaints about \u201cunintentional\u201d Prime sign-ups. (A different attachment, which includes an email chain dated September 25, 2017, appears to refer to the presentation. Two dozen people were asked to \u201cdelete the PowerPoint document\u201d and send \u201cconfirmation\u201d once they had.)<\/p>\n
One customer complaint in the presentation claims that they were \u201ctricked\u201d into signing up for a free trial for Amazon Prime when they selected two-day shipping on a purchase, not knowing that this would also sign them up for a trial for Prime.<\/p>\n
\u201cI DO NOT LIKE YOUR SERVICE,\u201d reads another complaint. \u201cTHIS IS CRAP THAT I ORDERED A PRODUCT IN AMAZON ADS [sic] ME TO A PROGRAM WITH AUTO BILLING THAT I DID NOT SIGN UP FOR. I WILL NOT USE AMAZON AND TELL EVERYONE ABOUT THIS TYPE OF CRAP YOU ARE PULLING.\u201d<\/p>\n
\u201cIT IS SNEAKY AND BLOODY DISHONEST FORCING SOMETHING THE [sic] I NEVER WANTED,\u201d reads another complaint.<\/p>\n
The same Amazon slide presentation noted that confusing Prime sign-ups were leading to an increased burden on Amazon\u2019s customer service workers, as well as a \u201closs of customer trust.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Save StorySave this storySave StorySave this story Amazon has agreed to pay $2.5 billion to settle a lawsuit filed by the Federal Trade Commission, which alleged that the company has \u201cknowingly duped\u201d millions of people into enrolling in its Amazon Prime membership program by using what the FTC has described as \u201cdark patterns,\u201d or, "manipulative, […]<\/p>\n","protected":false},"author":1,"featured_media":33226,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":{"0":"post-33225","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/33225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=33225"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/33225\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/33226"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=33225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=33225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=33225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}