Amazon Will Pay $2.5 Billion to Settle FTC Suit That Alleged ‘Dark Patterns’ in Prime Sign-Ups
Amazon has agreed to pay $2.5 billion to settle a lawsuit brought by the Federal Trade Commission (FTC) that alleged the e-commerce giant used deceptive ‘dark patterns’ to enroll customers in its Prime membership program without their consent.
The FTC accused Amazon of making it difficult for users to cancel free trials of Prime, leading many customers to unwittingly continue the subscription and incur charges. The agency claimed Amazon used confusing language and design elements to mislead users into signing up for the service.
As part of the settlement, Amazon also agreed to make changes to its sign-up and cancellation processes for Prime, ensuring that customers are clearly informed of the terms and have an easy way to cancel their subscriptions.
FTC Chair Lina Khan praised the settlement as a victory for consumers, stating that it sends a strong message to companies that engaging in deceptive practices will not be tolerated.
Amazon has denied any wrongdoing but agreed to the settlement to avoid a protracted legal battle. The $2.5 billion payment is one of the largest ever made in a consumer protection case.
The settlement marks a significant development in the enforcement of consumer protection laws in the digital age, where companies often use sophisticated tactics to maximize profits at the expense of consumers.
Consumer advocacy groups have welcomed the FTC’s action against Amazon, saying it sets an important precedent for holding tech giants accountable for their practices.
Amazon’s Prime membership program has been a key driver of the company’s growth, with millions of subscribers worldwide. The settlement will likely have a lasting impact on how Amazon and other companies market subscription services to consumers.
Overall, the settlement highlights the need for greater transparency and accountability in the digital economy, where companies wield enormous power over consumer behavior.