Amazon Stock (NASDAQ:AMZN)
In its second action against the e-commerce giant in recent weeks, the U.S. Federal Trade Commission on Wednesday accused Amazon.com (NASDAQ:AMZN) of enrolling millions of users onto its paid membership Amazon Prime program without their knowledge and making it difficult for them to withdraw. As a result, Amazon stock declined.
The Federal Trade Commission filed a lawsuit against Amazon in a Seattle federal court, claiming that “Amazon has knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime.” According to the Federal Trade Commission, Amazon employed “manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically renewing Prime subscriptions.”
President Joe Biden’s government has taken several steps, including this lawsuit, to reduce the monopoly power of large technology companies and boost consumer protection via more competition.
The Federal Trade Commission has said that Amazon Prime is the most successful membership service in the world. Fast and free delivery on millions of things, savings on a wide range of products, and streaming video and audio of popular shows and movies are just a few of its perks. Prime subscribers in the United States pay $139 annually and are responsible for a significant portion of Amazon’s revenue. More than 200 million people throughout the globe are Prime subscribers.
According to the FTC, “increasing subscriber numbers is one of Amazon’s primary business goals, and the primary business goal of Prime.”
According to the complaint in April, Amazon changed its cancellation procedure after facing significant criticism from the FTC, but “violations are ongoing” and “consumers still require five clicks on desktop and six clicks on mobile to cancel from Amazon.com.”
The government is asking for monetary damages and an injunction against further infringement.
In midday trade, Amazon stock price fell 0.9%.
A representative from the firm waited to return a call seeking comment.
Since March 2021, the FTC has been looking into the Prime program’s sign-up and cancellation procedures.
FTC Chair Lina Khan stated in a statement that “Amazon tricked and trapped people into recurring subscriptions without their consent,” adding that this practice caused customers frustration and cost them a lot of money.
According to the lawsuit, customers who wanted to discontinue Prime were met with a maze of hoops to jump through. According to the FTC lawsuit, Amazon initiated a procedure called “Iliad Flow” in 2016, naming it after Homer’s epic poem about the protracted Trojan War.
Amazon also responded in “bad faith” to the FTC’s demands for records, which the agency characterized as “intentional misconduct” designed to obstruct the probe.
On May 31st, the FTC announced a settlement with Amazon’s Ring doorbell camera division for $5.8 million due to allegations of snooping by the company’s cameras. Amazon agreed to pay $25 million to resolve FTC accusations that it violated children’s privacy rights by failing to erase recordings made with its Alexa virtual assistant technology upon parental request and retaining such recordings for longer than required.
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Author Shariq Khan 
