Amazon.com pays record fine for fraudulent Prime subscriptions

Amazon.com is alleged to have tricked millions of consumers in the USA into paying for Prime subscriptions through confusing and misleading designs. At the same time, the online retailer is alleged to have deliberately made it difficult to cancel Prime subscriptions. With these allegations, the US Federal Trade Commission (FTC) sued Amazon in 2023. The company and two responsible Amazon managers have now accepted a settlement under which the group will pay a fine of one billion US dollars.

In terms of scale, this corresponds to half of the Group's global turnover on an average day. Half of the fine is due immediately, the second half in a year and a half. In addition, Amazon must repay 1.5 billion US dollars to US customers who have been overcharged. It will be the second largest restitution program ever obtained by the FTC. Only in the case of Volkswagen has the FTC settled a larger amount of money as a result of the diesel scandal, namely 9.5 billion dollars.

"The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime," said FTC Chairman Andrew N. Ferguson, "and then made it exceedingly hard for consumers to end their subscription." Internal Amazon documents would prove that this was done knowingly; for example, the foisted subscriptions were described as an "unspoken cancer".

Concrete measures

In the run-up to the lawsuit, Amazon is alleged to have suppressed documents and deliberately made false statements to obstruct and delay the FTC investigation. The company denies these allegations.

The agreement now reached with Amazon is intended to ensure that the company no longer does this. The measures include a clear, conspicuous button to reject the Prime subscription in the ordering process. "Amazon can no longer have a button that says 'No, I don't want free delivery'," emphasises the FTC.

Amazon is also committed to making subscription cancellations simple. They must not be difficult or time-consuming and must be able to be cancelled using the same method with which the subscription was originally concluded. These obligations only apply to the United States of America.

Own experience

At some point, Amazon also managed to foist an unwanted Prime subscription on the author of these lines. I pay attention like a stickler. I still don't know what I clicked on wrong. All it took was a single click – and that was before I had even completed the order I really wanted.

When I wanted to cancel this unwanted subscription immediately, it turned out that there was apparently no option to do so during the free introductory phase. At least I couldn't find it on the online shop's website. I had to negotiate the cancellation via a chat with an Amazon employee.

The FTC is celebrating the payment of one billion dollars as the highest fine for violation of an FTC rule to date. This is correct, but the FTC has already taken tougher action on a different legal basis: As a result of the Cambridge Analytica scandal, the authority asked Facebook (Meta Platforms) to pay five billion dollars in 2019. This case (case no. C-4365) is still being heard in court today.

• The comparison document in the case Federal Trade Commission v Amazon.com et al, US Federal District Court for Western Washington, Case No. 2:23-cv-0932
• The lawsuit from 2023 (partially redacted)

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