FTC sues Amazon over Prime cancellation process
On Wednesday, the Federal Trade Commission took aim at the tech giant Amazon for keeping customers tethered too tightly to their Prime subscriptions.
The subscription costs customers $139 a year for perks like free shipping, access to their streaming service Amazon Prime Video, and discounts on various products. Those perks get customers in the door, but their exit is far from a simple click away, the lawsuit claims.
"Once they’re on it's claiming that it made it really hard to cancel their Amazon subscriptions," said Lance Ulanoff, the editor-in-Chief of Tech Radar. "The thing about any service that you pay likely monthly, and yearly it’s not in their best interests to let you get out of them that easily."
But the FTC accuses the giant of a years-long effort to enroll consumers into its prime program while making it too difficult to cancel to the point where it crosses the legal line.
The FTC claims once consumers located the cancelation flow, they’re redirected to multiple pages that presented several offers to continue their subscription at a discounted price, to simply turn off the auto-renew feature, or to decide not to cancel. Only then, the FTC says consumers could finally cancel the service.
"The bigger question here is how much control and power do big tech companies like this have," questioned Ulanoff.
Law professor Pedram Tabibi answered that question for FOX 5.
"The FTC has proposed a rule called click to cancel where they make all companies make it as easy as it is to sign up for a service to cancel that service," said Tabibi.
The results of the litigation, he says, could bleed out into other tech giants and subscription-based industry leaders.
"If you're a company out there whose got customers, you’ve better be careful about how you have them sign up and how hard you make it for them to cancel," Tabibi added.
Amazon did share their side of things with us in a statement saying:
"The FTC’s claims are false on the facts and the law. 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. As with all our products and services, we continually listen to customer feedback and look for ways to improve the customer experience, and we look forward to the facts becoming clear as this case plays out. We also find it concerning that the FTC announced this lawsuit without notice to us, in the midst of our discussions with FTC staff members to ensure they understand the facts, context, and legal issues, and before we were able to have a dialog with the Commissioners themselves before they filed a lawsuit. While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court."