FTC Sues Amazon Over Shady Prime Practices
In a statement, FTC Chair Lina Khan said Amazon users were “tricked” into recurring subscriptions and alleged that the company’s actions were “not only frustrating users but also costing them significant money.” The full details haven’t been revealed, but one of the things the lawsuit seems to be seeking is a civil penalty with an unspecified dollar amount. In addition to the current accusations, Amazon’s higher-ups are also accused of resisting changes that would have made it easier for users to cancel their Prime subscriptions.
The subscription as it exists currently costs $139 per year, and includes benefits like free high-speed shipping, access to the “Prime Video” online streaming service, and the ability to shop in Amazon’s annual “Prime Day” sales, among other benefits. There are currently over 200 million Prime users across the globe.
This isn’t the first time Amazon has fallen foul of the FTC
Amazon has had a few run-ins with the FTC over the years, includingan incident a few years agorelating to in-app charges which saw around $70 million refunded to customers. The purchases in question were made by children who did not have the permission of the account holders at the time. The suit argued the bright buttons and enticing pictures encouraged minors to make the purchases, and an eventual settlement left the Silicon Valley-based company dishing out refunds to all affected customers who applied.
It’s likely that a similar ruling, in this case, would see at least some Prime members receive monetary compensation, in addition to Amazon having to change its marketing practices.
Customers aren’t the only ones who have been the subjects of one of Amazon’s perceived wrongdoings. Last year, the company wasaccused of stealing tips from delivery drivers. The accusations followed a previous incident which led to the company quietly reimbursing some of its delivery drivers after reaching an agreement with the FTC over a separate incident.
