Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 1 of 87
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Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 1 of 87
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
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COMPLAINT FOR PERMANENT
INJUNCTION, CIVIL
PENALTIES, MONETARY
RELIEF, AND OTHER
EQUITABLE RELIEF
Plaintiff,
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Civil Action No. ____________
2:23-cv-0932
FEDERAL TRADE COMMISSION,
v.
AMAZON.COM, INC., a corporation,
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Defendant.
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Plaintiff, the Federal Trade Commission (“FTC” or “the Commission”), alleges:
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1.
Plaintiff brings this action under Sections 5(a), 5(m)(1)(A), 13(b), 16(a), and 19 of
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the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(m)(1)(A), 53(b), 57b, and the
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Restore Online Shoppers’ Confidence Act, (“ROSCA”), 15 U.S.C. § 8404, which authorize the
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FTC to seek, and the Court to order, permanent injunctive relief, restitution, civil penalties, and
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other equitable relief for Defendant’s acts or practices in violation of Section 5(a) of the FTC
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Act, 15 U.S.C. § 45(a), and Section 4 of ROSCA, 15 U.S.C. § 8403.
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COMPLAINT
Case No. _:__-cv-_____
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Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 2 of 87
SUMMARY OF CASE
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For years, Defendant Amazon.com, Inc. (“Amazon”) has knowingly duped
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millions of consumers into unknowingly enrolling in its Amazon Prime service (“Nonconsensual
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Enrollees” or “Nonconsensual Enrollment”). Specifically, Amazon used manipulative, coercive,
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or deceptive user-interface designs known as “dark patterns” to trick consumers into enrolling in
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automatically-renewing Prime subscriptions.
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The Nonconsensual Enrollment problem was well known within Amazon.
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In a draft memorandum
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Some Amazon employees pushed the company executives responsible for
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Prime—including Neil Lindsay (“Lindsay”), Russell Grandinetti (“Grandinetti”) and Jamil
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Ghani (“Ghani”)—to address Nonconsensual Enrollment and make changes so that Amazon
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would not be tricking its customers.
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COMPLAINT
Case No. _:__-cv-_____
2
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 3 of 87
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Amazon and its leadership—including Lindsay, Grandinetti, and Ghani—slowed, avoided, and
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even undid user experience changes that they knew would reduce Nonconsensual Enrollment
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because those changes would also negatively affect Amazon’s bottom line.
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For years, Amazon also knowingly complicated the cancellation process for
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Prime subscribers who sought to end their membership. Under significant pressure from the
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Commission—and aware that its practices are legally indefensible—Amazon substantially
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revamped its Prime cancellation process for at least some subscribers shortly before the filing of
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this Complaint. However, prior to that time, the primary purpose of the Prime cancellation
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process was not to enable subscribers to cancel, but rather to thwart them. Fittingly, Amazon
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named that process “Iliad,” which refers to Homer’s epic about the long, arduous Trojan War.
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Amazon designed the Iliad cancellation process (“Iliad Flow”) to be labyrinthine, and Amazon
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and its leadership—including Lindsay, Grandinetti, and Ghani—slowed or rejected user
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experience changes that would have made Iliad simpler for consumers because those changes
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adversely affected Amazon’s bottom line.
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As with Nonconsensual Enrollment, the Iliad Flow’s complexity resulted from
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Amazon’s use of dark patterns—manipulative design elements that trick users into making
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decisions they would not otherwise have made.
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COMPLAINT
Case No. _:__-cv-_____
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Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 4 of 87
JURISDICTION AND VENUE
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and 1345.
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This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a),
Venue is proper in this District under 28 U.S.C. § 1391(b)(2), (b)(3), (c)(1),
(c)(2), (c)(3), and (d), and 15 U.S.C. § 53(b).
PLAINTIFF
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The FTC is an independent agency of the United States Government created by
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the FTC Act, which authorizes the FTC to commence this district court civil action by its own
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attorneys. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC Act,
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15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce.
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The FTC also enforces ROSCA, 15 U.S.C. §§ 8401-8405, which prohibits the sale of goods or
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services on the Internet through negative option marketing without meeting certain requirements
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for disclosure, consent, and cancellation to protect consumers. A negative option is an offer in
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which the seller treats a consumer’s silence—i.e., their failure to reject an offer or cancel an
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agreement—as consent to be charged for goods and services. 16 C.F.R. § 310.2(w).
DEFENDANT
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Defendant Amazon transacts and has transacted business in this District and
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throughout the United States. It is one of the world’s largest online retailers, and is
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headquartered in Seattle, Washington, with its principal place of business at 410 Terry Avenue
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North, Seattle, Washington 98109.
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COMPLAINT
Case No. _:__-cv-_____
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Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 5 of 87
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At all times relevant to this Complaint, acting alone or in concert with others,
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Amazon advertised, marketed, distributed, or sold a paid subscription service, Prime, that gives
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subscribers throughout the United States access to additional services otherwise unavailable or
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available only at an additional charge to other consumers. Among other things, these premium
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services include expedited “free” delivery of merchandise from Amazon’s vast online
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marketplace, streaming content, and grocery delivery.
COMMERCE
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At all times relevant to this Complaint, Amazon has maintained a substantial
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course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act,
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15 U.S.C. § 44.
DEFENDANT’S BUSINESS ACTIVITIES
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Consumers pay $139 per year or $14.99 monthly to subscribe to Prime. Prime
subscription fees account for $25 billion of Amazon’s annual revenue.
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Approximately 70% of Amazon’s revenue comes from American consumers.
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Subscribers are critical to Amazon’s overall ecommerce business because Prime
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subscribers spend more than
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Prime shoppers.
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as much shopping on Amazon as compared to non-
Consequently, one of Amazon’s primary business goals—and the primary
business goal of Prime—is increasing subscriber numbers.
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Within Amazon’s corporate structure, the Prime organization or department
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(“Prime Organization”) operates Prime. Amazon evaluates the Prime Organization’s
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performance based on the
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COMPLAINT
Case No. _:__-cv-_____
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Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 6 of 87
Typical Prime Enrollment Experiences
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Consumers can subscribe to Prime through multiple pathways including through
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Amazon devices (like the Amazon Fire TV streaming device), while using Prime Video, or
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through Prime’s unique webpage (“Prime Central”). However,
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the Amazon shopping checkout process.
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subscriptions occur through
The basic consumer checkout enrollment experience proceeds as follows on both
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desktop and mobile devices. Consumers who are not Prime members visit Amazon’s website—
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www.Amazon.com—to shop. They place items in their cart, and then provide (or confirm) their
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billing and address information. They then select a large orange “Continue” button, which
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typically appears in the lower right corner of the page, and move through additional pages to
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proceed with their purchase. Finally, consumers either complete their order by purchasing the
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items in their cart or abandon their cart.
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Amazon presents all consumers who are not Prime subscribers with at least one
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opportunity (also known as an “upsell”)—and often several opportunities—to join Prime before
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those consumers place their order on the final checkout page. Amazon has two primary types of
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upsells that enroll consumers: interstitials and non-interstitials. An interstitial is a page that
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interrupts consumers’ online shopping experience by appearing before the page that consumers
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seek to access in the first place. In contrast, non-interstitial upsells are elements imbedded
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within checkout pages, including shipping-option selection and payment pages.
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COMPLAINT
Case No. _:__-cv-_____
6
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 7 of 87
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called the
On desktop devices, Amazon has several Prime upsells: an interstitial upsell
an d three non-interstitial upsells called the
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On mobile devices, Prime upsells miITor those on desktop, an d include
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the
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on Desktop . Amazon calls the Prime interstitial upsell th e . Although th e -
has changed over time, it generally inte1n 1pts
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consumers' online shopping experience by presenting them with a prominent button to enroll in
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Prime and a comparatively inconspicuous link to decline. Consumers cannot avoid th e -
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The upsell forces consumers to select either the button or the link to proceed to checkout. See
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Attachments A- D.
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The -
orange button, which enrolls a consumer in Prime if clicked, is
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located toward the bottom right of the screen and often includes language referencing "free
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shipping" or a "free trial."
See Attachment A
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See
Attachments C and D.
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COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
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Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 8 of 87
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see Attachment A and B,
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see Attachments C and D,
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free trial,
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If a consumer clicks the orange button, Amazon enrolls the consumer in a Prime
The
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Attachment C.
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see Attachment A,
see Attachment B.
See
See Attachment D.
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See Attachments A–D.
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The
does not adequately disclose the price of the monthly auto-renewal
feature of Prime.
. See Attachments A–D.
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includes language that the consumer will not receive
“free shipping.”
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’s blue link, which declines the Prime membership if clicked,
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COMPLAINT
Case No. _:__-cv-_____
8
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 9 of 87
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See Attachment E .
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(c)
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COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
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Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 10 of 87
See Attachment E.
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(d)
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See Attachment E.
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(e)
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See Attachment E.
(f)
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See
Attachment E.
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(a)
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COMPLAINT
Case No. _:__-cv-_____
10
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 11 of 87
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See Attachment F.
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(b)
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See Attachment F.
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(c)
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See Attachment F.
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(d)
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. See Attachment F.
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Separate from the
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, various Prime upsells appear as elements within the
online checkout flow, which itself appears in various versions to consumers depending on factors
COMPLAINT
Case No. _:__-cv-_____
11
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 12 of 87
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(i.e., whether a consumer has previously declined a Prime upsell).
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on Desktop.
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. See Attachment G, at 3–4.
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COMPLAINT
Case No. _:__-cv-_____
12
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 13 of 87
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See Attachment G, at 5.
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See Attachment G, at 6.
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COMPLAINT
Case No. _:__-cv-_____
13
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 14 of 87
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See Attachment G, at 7 .
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COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
14
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 15 of 87
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See Attachment H, at 3–4.
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See Attachment H, at 5.
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COMPLAINT
Case No. _:__-cv-_____
15
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 16 of 87
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See Attachment H,
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at 5.
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See Attachment H, at 5.
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COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
16
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 17 of 87
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See Attachment H, at 6.
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on Desktop.
See Attachments I–K.
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COMPLAINT
Case No. _:__-cv-_____
17
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 18 of 87
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Attachment I with Attachments J and K.
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See Attachment
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I, at 3.
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COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
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Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 19 of 87
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See Attachment K, at 4.
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See Attachment I, at 4.
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See Attachment I, at 4.
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COMPLAINT
Case No. _:__-cv-_____
19
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 20 of 87
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See Attachment I, at 4.
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See Attachment I, at 4.
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COMPLAINT
Case No. _:__-cv-_____
20
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 21 of 87
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See Attachment I, at 4.
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COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
21
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 22 of 87
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See Attachment J, at 7.
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See
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Attachment J, at 7.
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COMPLAINT
Case No. _:__-cv-_____
22
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 23 of 87
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See Attachment K, at 5.
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See Attachment J, at 8.
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COMPLAINT
Case No. _:__-cv-_____
23
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 24 of 87
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See Attachment J, at 8.
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, Prime upsells on the mobile checkout flow have mirrored
those on desktop checkout, and have included the
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Navigating Prime upsells on mobile devices is more difficult than on a desktop.
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Amazon often places material terms such as price and auto-renewal terms at the very bottom of
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the mobile page—past the point viewable on the screen unless the consumer scrolls down—
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where consumers are least likely to see this information. On mobile devices, consumers are also
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more likely to select a prominent option without scrutinizing fine print.
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COMPLAINT
Case No. _:__-cv-_____
24
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 25 of 87
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Mobile (Past).
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See Attachment L, at 4.
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See Attachment L, at 5-6.
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COMPLAINT
Case No. _:__-cv-_____
25
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 26 of 87
1
68.
See
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Attachment L, at 7.
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See Attachment L, at 7.
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COMPLAINT
Case No. _:__-cv-_____
26
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 27 of 87
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See Attachment L, at 8.
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The
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problematic elements as the
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The
on mobile devices contained similar
on desktop.
on mobile
required consumers to either
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accept or decline a Prime subscription before allowing them to continue shopping. See
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Attachment M.
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COMPLAINT
Case No. _:__-cv-_____
27
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 28 of 87
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as
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The
on mobile also contained similar problematic elements
on desktop.
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See Attachment N, at 3-4.
See Attachment N, at 5-6.
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See Attachment N, at 7.
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COMPLAINT
Case No. _:__-cv-_____
28
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 29 of 87
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See Attachment N, at 8.
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Mobile (Current). In 2022, Amazon
78.
The current mobile upsells contain many of the same problematic elements as the
—including misleading language and manipulative designs—which lead
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consumers to enroll in Prime without their consent.
79.
Consumers using mobile devices to navigate to Amazon.com can select a product
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by clicking a large yellow button (“Add to Cart”), and continue shopping, or a large orange
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button (“Buy Now”) to proceed directly to the checkout. See Attachment O, at 1. Consumers
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who continue shopping add additional products to their cart by clicking the large yellow “Add to
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Cart” button, until they finish and choose another large yellow button (“Proceed to checkout”),
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which takes the consumer to the next step. See Attachment O, at 2.
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COMPLAINT
Case No. _:__-cv-_____
29
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 30 of 87
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1
At this point, the consumer signs in (if the consumer has not already) and clicks a
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large yellow “Continue” button to proceed to a mobile
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signed in proceed directly to the mobile
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. Consumers who have already
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Consumers without an account must create one before reaching the mobile
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Creating an account involves four steps: entering an email address, creating a password, and
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adding an address and a payment method. See Attachment O, at 3-4. Completing these steps
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takes the consumer to the mobile
82.
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- .
When a consumer reaches the mobile
, Amazon divides the page, with a
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footer (sometimes known as a “sticky footer”) that occupies the screen’s bottom half, rendering
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only a portion of the top half visible unless the consumer scrolls down. See Attachment O, at 5.
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ama.zon
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COMPLAINT
Case No. _:__-cv-_____
30
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 31 of 87
1
83.
At the top of the mobile
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, Amazon informs the consumer that “we’re giving
2
you 30 days of Prime for FREE.” See Attachment O, at 5. Smaller text below reads: “After
3
your FREE trial, Prime is just $14.99/month,” but does not reference Prime’s auto-renewal
4
feature. Consumers can view this section without scrolling.
5
.
re I v111lil
ri11itie for
6
7
8
9
84.
The sticky footer on the lower half of the screen contains double-stacked buttons:
10
the top yellow “Get FREE Two-Day Delivery with Prime” button and an image appearing to be a
11
gray lower button labelled “Save $5.99 instantly on this order.” See Attachment O, at 5.
12
Amazon enrolls consumers who click the yellow button in Prime. As such, a consumer can
13
enroll in Prime without viewing the portion of the page that the sticky footer hides.
14
15
et F
16
5
el'
ry
me
17
18
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
31
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 32 of 87
1
85.
If a consumer scrolls down, Amazon shows consumers a table comparing the
2
“Perks of Prime” with “Without Prime.” See Attachment O, at 5. For instance, perks of Prime
3
include “Fast, FREE delivery on Prime eligible items,” “[a]ll the music + top podcasts ad-free on
4
Amazon Music,” and “Prime Video – Enjoy award-winning Amazon Originals, movies and TV
5
shows” whereas without Prime, a consumer has “[m]inimum order requirements,” “[m]usic
6
listening with ads,” and Prime Video “[n]ot included.”
-
7
8
9
30
10
11
12
13
14
15
16
17
18
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
32
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 33 of 87
1
86.
The following text is visible at the bottom of the sticky footer, in the smallest type
2
on the screen: “By signing up, you acknowledge that you have read and agree to the Amazon
3
Prime Terms and . . . See all.” See Attachment O, at 5. If the consumer continues scrolling,
4
additional information about Prime’s “Terms and Conditions” and “Shipping Benefits” becomes
5
visible in small text beneath the “No thanks” link. A sentence in the middle of this additional
6
text reads: “Your Amazon Prime membership continues until cancelled. If you do not wish to
7
continue for $14.99/month plus any applicable taxes, you may cancel anytime by visiting Your
8
Account and adjusting your membership settings.”
9
Fast, FREE delivery on
Minimum order
requ irements
Prime eligible items
10
All the music + top podcasts
Music listening with ads
ad-free on Amazon Music
Not included
Prime Video - Enjoy awardwinning Amazon Originals,
11
fi
12
movies and TV shows
13
Use my gift card balance, when ava ilable,
to pay fo r Prime.
14
Get FREE Two-Day Delivery with Prime
15
Save $5.99 inst antly on t his order
16
No thanks
17
By signin g up, you acknowledge th at you have read
and agree t o t he Amazon Prime Terms and
Conditions and aut horize us to charge your defa ult
payment method (Visa '"'- 3947) or another
availab le payment m ethod on file after your 30-day
free trial. Your Amazon Prime membership
18
continues until cancelled. If you do not wish to
continue for $14.99/month plus any applicable
taxes, you may cancel anytime by visiting Your
Account and adjusting your membership settings.
19
20
For customers in Hawaii, Puerto Rico, and Alaska
please vi sit the Amazon Prime Shippinq Benefits
i ama zon .com
21
22
23
COMPLAINT
Case No. _:__-cv-_____
33
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 34 of 87
1
87.
If a consumer clicks the downward arrow on the top right of the sticky footer,
2
Amazon also reveals the additional text beneath the “No thanks” link. The arrow is adjacent to
3
the yellow “Get Free Two-Day Delivery with Prime” button that will enroll the consumer in
4
Prime. If a consumer clicks the button while attempting to click the adjacent sticky footer arrow,
5
Amazon enrolls the consumer in Prime.
6
7
8
9
10
11
88.
Consumers cannot view the full text beneath the “No thanks” link without
12
scrolling or clicking the sticky footer arrow. However, consumers can enroll in Prime by
13
selecting the large yellow “Get FREE Two-Day Delivery with Prime” button without scrolling.
14
See Attachment O, at 5.
15
16
17
89.
Consumers can proceed with their purchase if they select either the yellow button
or the blue “No thanks” link. See Attachment O, at 5.
90.
If the consumer selects the yellow “Get FREE Two-Day Delivery with Prime”
18
button, Amazon brings the consumer to a final page with a yellow “Place your order” button and
19
“Congratulations, your Prime free trial has started! We’ll email you about all Prime benefits”
20
underneath. Therefore, Amazon enrolls the consumer in Prime before the consumer has even
21
placed the order. The final page of the flow also contains an “Order Total” that does not include
22
Prime’s price. See Attachment O, at 6.
23
COMPLAINT
Case No. _:__-cv-_____
34
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 35 of 87
1
91.
On this final page, the consumer can change or confirm shipping and billing
2
information, remove products from the cart, and make other changes such as adding gift receipts
3
or providing delivery instructions. See Attachment O, at 6. The consumer can also select a
4
shipping method.
5
92.
The yellow button labelled “Place your Order” allows consumers to make their
6
purchase. See Attachment O, at 6. Prime’s price and auto-renewal feature do not appear on the
7
page, the consumer cannot remove Prime, and the consumer cannot back up and choose “No
8
thanks” to Prime on the prior page.
9
93.
In each pathway (
, and mobile), Amazon fails to
10
provide clear and conspicuous disclosures regarding the Prime subscription program’s material
11
terms: its price, and the fact that it renews automatically unless the consumer affirmatively
12
cancels. Furthermore, in each pathway
13
does not provide any disclosures at all before Amazon collects billing information from
14
consumers.
15
94.
, and mobile), Amazon
Prime Video. Prime Video is a distinct product from Prime. Specifically, Prime
16
Video is a subscription-based video streaming service. Although it is possible to sign up for
17
Prime Video alone, it is difficult to do so.
18
19
20
95.
Amazon’s webpage tricked consumers into signing up for Prime instead of Prime
Video, which would be a lower-cost option.
96.
In particular, Amazon initially offers Prime Video as part of the full, more
21
expensive Prime package to consumers who reach the Prime Video homepage (or “storefront”)
22
to enroll in Prime Video. See Attachment P, at 1.
23
COMPLAINT
Case No. _:__-cv-_____
35
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 36 of 87
1
2
3
4
5
6
7
8
9
10
97.
11
Capitalizing on some consumers’ inability to appreciate the difference between
12
“Prime” and “Prime Video,” the Prime Video enrollment process fails to clarify Amazon will
13
enroll them in Prime rather than the less expensive Prime Video, on both desktop and mobile
14
platforms. This causes some consumers to enroll in Prime, rather than Prime Video,
15
unknowingly.
98.
16
17
Consumers can reach the Prime Video storefront through various ways, including
by searching “Prime Video” in an online search engine or the Amazon search bar.
99.
18
The initial Prime Video storefront displays the Prime Video logo at the top and an
19
orange button labelled “Watch with Prime. Start your 30-day free trial.” See Attachments P and
20
V.
21
22
23
COMPLAINT
Case No. _:__-cv-_____
36
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 37 of 87
1
100.
Amazon brings consumers who press the orange button to a second page and
2
prompts them to sign in (if they have an Amazon account) to confirm billing information, or to
3
create an account and submit billing information. This page also contains small print links to the
4
Amazon Prime Conditions of Use and Privacy Notice at the bottom of the page. See Attachment
5
V, at 2-5.
6
7
101.
Amazon does not, to this point, present the consumer with any marketing
regarding Prime, as opposed to Prime Video.
8
102.
After sign in or account creation, Amazon brings consumers to a page containing,
9
from top to bottom:
10
(a)
11
trial”;
12
(b)
the email associated with the account;
13
(c)
a table with “Confirm your details” at the top followed by the plan type,
14
which is “Prime. Enjoy unlimited streaming of thousands of movies and TV
15
shows plus FREE Two-Day Delivery on millions of items. $14.99/month after
16
trial” (to get Prime Video rather than Prime, the consumer must click a gray
17
“change” box to the right);
18
(d)
the consumer’s email, payment method, and billing address;
19
(e)
at the bottom, “By signing up, you acknowledge that you have read and
20
agree to the Amazon Prime Terms and Conditions and authorize us to charge your
21
preferred card or another available credit card on file after your 30-day free trial.
22
Your Prime membership continues until cancelled. If you don’t want to continue
23
the Prime logo with “Watch now, cancel anytime. Start your 30-day free
COMPLAINT
Case No. _:__-cv-_____
37
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 38 of 87
1
for $14.99/month plus any applicable taxes, you may cancel anytime by visiting
2
Your Account and adjusting your membership settings;” and
3
(f)
4
The button sits immediately above a gray area with text reading “Change or
5
cancel plan anytime. Pay later.” See Attachment P, at 2 and Attachment V, at 6.
an orange button in the bottom right corner, labelled “Start your free trial.”
6
7
8
9
10
11
12
13
14
15
16
17
103.
To enroll in Prime Video (instead of Prime), the consumer must click on the
18
“Change” button for the Plan information toward the top of the page, change the plan on the
19
subsequent page, and then navigate back to confirm the Prime Video selection. See Attachment
20
P, at 2 and Attachment V, at 6.
21
104.
22
23
COMPLAINT
Case No. _:__-cv-_____
38
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 39 of 87
1
See Attachment P, at 3.
2
3
4
5
6
7
8
9
10
105.
After receiving the June 30, 2022 CID, Amazon changed the Prime Video
11
enrollment flow for Prime. Now, when consumers click “Start your free trial” Amazon shows at
12
least some consumers a page titled “Welcome to Prime, [name]” that describes certain Prime
13
membership services. On this page, there is no option to cancel the Prime membership. Toward
14
the bottom are two buttons: on the left “Discover Prime benefits” (gray button) takes consumers
15
to an overview of Prime-related services, and on the right “OK” (blue button) continues to the
16
Prime Video storefront. See Attachment V, at 7-8.
17
18
19
20
21
22
23
106.
Prime Video (Mobile). Consumers may also enroll in Prime through Prime
Video on a mobile device.
107.
Like Prime Video on desktop, Prime Video on mobile tricked consumers into
signing up for Prime instead of Prime Video, which would be a lower-cost option.
108.
Like desktop Prime Video, the Prime Video mobile storefront displays the Prime
Video logo at the top and, toward the bottom of the page, an orange button labelled “Watch with
COMPLAINT
Case No. _:__-cv-_____
39
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 40 of 87
1
Prime. Start your 30-day free trial.” Above the orange button, in blue text, reads “Prime” and
2
then, in white text, “Watch for $0.00 with Prime.” See Attachment U, at 1.
3
4
5
6
7
8
9
10
11
12
13
14
109.
Amazon brings consumers who press the orange button to a “Welcome” page to
15
sign in (if they have an Amazon account) to confirm billing information, or to create an account
16
and submit billing information. The page also contains links to “Amazon’s Conditions of Use
17
and Privacy Notice.” See Attachment U, at 2.
18
110.
After sign in or account creation, Amazon then brings consumers to a page that
19
asks consumers to “Confirm your details,” and includes the following information from top to
20
bottom:
21
(a)
22
movies and TV shows plus FREE Two-Day Delivery on millions of items.
23
Next to “Plan” reads: “Prime. Enjoy unlimited streaming of thousands of
COMPLAINT
Case No. _:__-cv-_____
40
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 41 of 87
1
($14.99/month after trial).” Next to this text is an arrow similar to a greater-than
2
sign (“>”).
3
(b)
4
information.
5
(c)
6
Prime’s price and auto-renewal feature.
7
(d)
8
text beneath: “Change or cancel plan anytime. Pay later.” See Attachment U, at 5.
The page also lists consumer’s email, payment method, and billing address
There is then a link to Amazon Prime terms and conditions, as well as
Toward the bottom is an orange button “Start your free trial” with black
-~
9
prime
10
Confirm your details
Plan
11
Prime
Enjoy ul'im- t~ streamng of
tha.isands of IT10\0eS aDd TV
shows pl,, l'llEE Two-DdV
Deli'lefy on millt::lns of items.
l$14.93/m011t11a1tor lria\l
12
>
tm:iil
13
>
f"'Jym('nt
111ethod
Gift Caret lGi~ card batance- v.,fl
14
be used w.-.er1 a·1alab&el
>
BiUin,g
15
.address
16
By sigriing LIP. )'OU ack:nm-.1ed9e tra:t you have read
Jnd.o,gtt'C to (h~ 11.!l'J](M'I, Pn.me T('1ffl', ,1nrl ((}(l('.:l flon.-;
MOouthO<iZ< us to(llo~ 'fOJI p,efe ,rtd cord or
another avafia.ole cred : card a, fie after -,.our 30--<loy
fre-e trial Yoor Prime membersh p contln~ until
17
18
c.anceltcd. If you don want to continue for
$1 a.99/month plus any appllc•ble ,.,..._ you may
camel anytime by olsltlng Your ,\,;count and
adju:stirlliJ your member'!iliip settinis,
19
20
(hillli}e Of CdncEt r;,IJl 7)'1lmi!
PiJy1"1.et
21
22
23
COMPLAINT
Case No. _:__-cv-_____
41
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 42 of 87
1
111.
To enroll in Prime Video (instead of Prime), the consumer must click on the
2
“Plan” information toward the top of the page, change the plan on the subsequent page, and then
3
navigate back to confirm the Prime Video selection.
4
112.
If the consumer simply clicks the orange “Start your free trial” button, Amazon
5
enrolls the consumer in Prime—not Prime Video—but then immediately takes the consumer to
6
the Prime Video storefront page. See Attachment U, at 6.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
42
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 43 of 87
1
2
Prime’s Four-Page, Six-Click, Fifteen-Option Iliad Cancellation Process
113.
Under substantial pressure from the Commission, Amazon changed its Iliad
3
cancellation process in or about April 2023, shortly before the filing of this Complaint. Prior to
4
that point, there were only two ways to cancel a Prime subscription through Amazon: a) through
5
the online labyrinthine cancellation flow known as the “Iliad Flow” on desktop and mobile
6
devices; or b) by contacting customer service.
7
114.
The Iliad Flow required consumers intending to cancel to navigate a four-page,
8
six-click, fifteen-option cancellation process. In contrast, customers could enroll in Prime with
9
one or two clicks.
10
115.
Although consumers may have enrolled in Prime through devices other than
11
computers and smartphones, such as through the Prime Video application on the Amazon
12
FireStick and Fire TV, they could not cancel via these same technologies. Instead, they had to
13
use the Iliad Flow or call customer service.
14
15
16
116.
Amazon launched the Iliad Flow in 2016, and did not substantially change it in
the United States until in or about April 2023.
117.
To cancel via the Iliad Flow, a consumer had to first locate it, which Amazon
17
made difficult. Consumers could access the Iliad Flow from Amazon.com by navigating to the
18
Prime Central page, which consumers could reach by selecting the “Account & Lists” dropdown
19
menu, reviewing the third column of dropdown links Amazon presented, and selecting the
20
eleventh option in the third column (“Prime Membership”). This took the consumer to the Prime
21
Central Page.
22
23
COMPLAINT
Case No. _:__-cv-_____
43
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 44 of 87
1
118.
Once the consumer reached Prime Central, the consumer had to click on the
2
“Manage Membership” button to access the dropdown menu. That revealed three options. The
3
first two were “Share your benefits” (to add household members to Prime) and “Remind me
4
before renewing” (Amazon then sent the consumer an email reminder before the next charge).
5
See Attachment Q, at 1-2.
6
119.
The last option was “End Membership.” The “End Membership” button did not
7
end membership. Rather, it took the consumer to the Iliad Flow. See Attachment Q, at 2-3. It
8
was impossible to reach the Iliad Flow from Amazon.com in fewer than two clicks.
9
-~~
10
~·...
!l°l!""IP~
Monthly $74.99
September 2. 2022
u,.._.rx-~...tl.hod ...
Member.nip
Ma U.nl11ill~
11
Share your oeneftts
Mdlo,
Chec k nu l wh r1t'5 1nd 11fl-'d 1V1 lh yol• Pri n!IP f"n e1, b ~1.;J11p
~
12
Remind me before renewing
-
13
14
15
16
S.,-d~r....,.lnl,l.,-o,i, ~
t ,O,JOU.lc!,p1-
1Mhtt "11)11tflrMIGM&
End Merrtie" hip
--
Jy~.,_...,,.,,,,...._r),hlp~r,;'lllfll'--.
,air ,-.nn• ~an!fiu.
Exclusive de.als for Prime members
120.
See more w
Consumers could also reach the Iliad Flow by contacting customer service, asking
to cancel,
17
18
121.
Consumers could also reach the Iliad Flow from Amazon.com by typing “cancel
19
membership” in the search bar. This produced an “Alexa” answer that included an “End Your
20
Amazon Prime Membership” link. See Attachment T, at 2.
21
22
23
COMPLAINT
Case No. _:__-cv-_____
44
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 45 of 87
1
2
3
4
5
6
7
8
9
10
!r-ship 1•
0
ALEXA'S ANSWER
How to Cilncel memb ersh ip ?
To ca ncel yDur Prime mem bership, visit End Your Amazon Prime Members hip, t he n select En d Membership. Pa id mem bers w ho haven 't
used their be nefi ts are el igible Fo r a full refund of the curre nt m"mbership pe riod .
122.
Clicking the link did not end Prime membership. Instead, it took the consumer to
another page with a heading that read: “End Your Amazon Prime Membership.” The page
contained a button labelled “End Your Prime Membership.” Pressing the button did not end
Prime Membership. Instead, it took the consumer to the Iliad Flow. See Attachment T, at 3-4.
11
Shipping and Delive ry > Amazon Prime
12
Yo u can end your Prime members h ip by selecting the End Membership b utton on
this page.
13
Paid mem bers who haven't used t heir benefits are eligible for a fuU
refund of the current m e mbers hip period_ We'll process. t he re fu nd in
th ree t o five business days,
14
End 'Vour Prirne Membe,ship
15
• Additional subscript ions t ied to yo ur membe r.ihip wo n't renew once you r Prime
me m bership e nd s.
• If your Prime me m be rsh ip 1s ass:ocia ed wit h a service yo u recerve t hrough an ot her
company (such as Sp rint), cont act that company to m a nage you r Prime me m bership .
• Customers who sig n u p fo r Amazo n Pri me using the Android mobile shopping app m ust
mana ge the ir subsc riptio n t hrough Go ogle Subscript ion services.
16
17
To end yo ur Amazon Prime membership:
1. Go t o your Prime membe rship.
2 . Select Up da t e, C.i:ncel, ;rnd m o re, and fo ll ow the on-s.c reen instructions.
18
19
>
End Your Amazon Prime Membership
123.
The search bar pathway to the Iliad Flow varied somewhat depending on what
20
search the consumer ran. For instance, searching “how to turn off Prime,” or “cancel prime”
21
(rather than “how to cancel Prime”) took the consumer to a page with a link to Prime Central,
22
from which the consumer had to then locate the path to the Iliad Flow. Searching “End
23
COMPLAINT
Case No. _:__-cv-_____
45
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 46 of 87
1
Membership” took the consumer to a page with three blue links under the heading “Closing your
2
Amazon account,” and a subheading “Get information on how to close your Amazon account.”
3
The middle link was “cancel membership.” Clicking “cancel membership” did not cancel
4
membership. Instead, it took the consumer to the Iliad Flow.
5
6
7
8
124.
Typing “cancel membership” in the search bar on a mobile device brought the
consumer to the Iliad Flow through similar steps. See Attachment S.
125.
Thus, to reach the Iliad Flow, consumers had to do one of the following: 1)
contact customer service and inform a customer service agent that they wanted to cancel
■
; 2) navigate from Amazon.com to
9
10
the Prime account management page (Prime Central), locate the “manage membership”
11
dropdown, and press a button labelled “End Membership”; or 3) search “How to cancel
12
membership” in the Amazon search bar, then move through subsequent steps to reach the Iliad
13
Flow—frequently, selecting a link reading “End Your Amazon Prime Membership” and then
14
pressing a button reading “End Your Prime Membership.”
15
126.
Once consumers reached the Iliad Flow, they had to proceed through its
16
entirety—spanning three pages, each of which presented consumers several options, beyond the
17
Prime Central page—to cancel Prime. See Attachment Q.
18
127.
On the first page of the Iliad Flow, Amazon forced consumers to “[t]ake a look
19
back at [their] journey with Prime” and presented them with a summary showing the Prime
20
services they used. Amazon also displayed marketing material on Prime services, such as Prime
21
Delivery, Prime Video, and Amazon Music Prime. Amazon placed a link for each service and
22
encouraged consumers to access them immediately, i.e., “Start shopping today’s deals!”, “You
23
COMPLAINT
Case No. _:__-cv-_____
46
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 47 of 87
1
can start watching videos by clicking here!”, and “Start listening now!” See Attachment Q, at 3.
2
Clicking on any of these options took the consumer out of the Iliad Flow.
3
You still have 7 days left to enjoy your Prime benefits until the next billing cycle
4
Your benefit usage
PRIM[BENEmsusrn:
5
0
6
Pac ges st,1pped for free
with Prim~ Dielivery. St<irt
shopping toddy~ deals!
7
~
PAsT 12Mo T Hs
Movies and TV shows
watched w,th P me
mO
V,dro. Ycu can ,rart
watching videos by
cl,cl.,ng here!
I PAST woAvs
0
songs Ii ened 10 wtth
Alnan,n Mustc Pn~.
Start lisle ,ng now!
8
9
128.
Also, on page one of the Iliad Flow, Amazon presented consumers with three
10
buttons at the bottom. “Remind Me Later,” the button on the left, sent the consumer a reminder
11
three days before their Prime membership renews (an option Amazon had already presented the
12
consumer once before, in the “Manage Membership” pull-down menu through which the
13
consumer entered the Iliad Flow). The “Remind Me Later” button took the consumer out of the
14
Iliad Flow without cancelling Prime. “Keep My Benefits,” on the right, also took the consumer
15
out of the Iliad Flow without cancelling Prime. Finally, “Continue to Cancel,” in the middle,
16
also did not cancel Prime but instead proceeded to the second page of the Iliad Flow. See
17
Attachment Q, at 3. Therefore, consumers could not cancel their Prime subscription on the first
18
page of the Iliad Flow.
19
C I l ~ To C..n,rl
20
~
•p V a nef lS
....
Continue enjoyir,g your dcil;very bl!nefit.,
21
Mme V-ldeo and m,my other benefits.
22
23
COMPLAINT
Case No. _:__-cv-_____
47
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 48 of 87
1
129.
On the second page of the Iliad Flow, Amazon presented consumers with
2
alternative or discounted pricing, such as the option to switch from monthly to annual payments
3
(and vice-versa), student discounts, and discounts for individuals with EBT cards or who receive
4
government assistance. Amazon emphasized the option to switch from monthly to annual
5
payments by stating the amount a consumer would save at the top of this page in bold. Clicking
6
the orange button (“Switch to annual payments”) or the links beneath took the consumer out of
7
the Iliad Flow without cancelling. See Attachment Q, at 4.
8
Get all the benefits of Prime for less
9
We'd like to offer you the chance o enjoy all the benefits of Prime for only
$139/year.
10
11
Are you
12
13
rtudont?
Hdve a11 EBT card/recei, govemment 5Sinance?
130.
Right above these alternatives, Amazon stated “Items tied to your Prime
14
membership will be affected if you cancel your membership,” positioned next to a warning icon.
15
See Attachment Q, at 4.
16
131.
Amazon also warned consumers that “[b]y cancelling, you will no longer be
17
eligible for your unclaimed Prime exclusive offers,” and hyperlinked to the Prime exclusive
18
offers. See Attachment Q, at 4. Clicking this link took the consumer out of the Iliad Flow
19
without cancelling.
20
21
Items tied to your Prime membership w·u be affected if you c
1. By ca celling, you will no longer
c l your membership.
ligible for your uncl imet:I Prime uclusive offers.
22
23
COMPLAINT
Case No. _:__-cv-_____
48
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 49 of 87
132.
1
Finally, at the bottom of Iliad Flow page two, Amazon presented consumers with
2
buttons offering the same three options as the first page: “Remind Me Later,” “Continue to
3
Cancel,” and “Keep My Membership” (labelled “Keep My Benefits” on the first page). See
4
Attachment Q, at 4. Once again, consumers could not cancel their Prime subscription on the
5
second page of the Iliad Flow. Choosing either “Remind Me Later” or “Keep My Membership”
6
took the consumer out of the Iliad Flow without cancelling. Consumers had to click “Continue
7
to Cancel” to access the third page of the Iliad Flow.
133.
8
On the third page of the Iliad Flow, Amazon showed consumers five different
9
options, only one of which, “End Now”—presented last, at the bottom of the page—
10
immediately cancelled a consumer’s Prime membership. See Attachment Q. Pressing any of the
11
first four buttons took the consumer out of the Iliad Flow without immediately cancelling.
134.
12
On the third page of the Iliad Flow, the first and second options—“Remind Me
13
Later” and “Keep My Membership”—were substantially identical to the buttons on the Iliad
14
Flow’s first two pages. Therefore, Amazon forced consumers who reach the Iliad Flow’s last
15
page to view the “Remind Me Later” option four times (including once to enter the Iliad Flow)
16
and the “Keep My Membership” option three times. See Attachment Q, at 5.
17
Vou
ul
ing:
18
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
49
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 50 of 87
1
135.
The third option, “Pause on [date],” would “pause” or put on hold—but not
2
cancel—a consumer’s Prime membership. Amazon did not charge “paused” members for Prime
3
but made it simple for “paused” members to re-join Prime through a single “quick-resume” click.
4
Amazon presented the “pause” option adjacent to a warning icon and text stating that, “[b]y
5
pausing, [consumers] will no longer be eligible for [their] unclaimed Prime exclusive offers,”
6
and provided links to “Prime exclusive offers” (which if clicked exit the Iliad Flow without
7
canceling). See Attachment Q, at 5.
8
aus yo1J Prime m m
9
511ip:
to yo-,.-
10
rime mcmben ip
d rf
au
u e your m
mbe hip.
II flQlon lllf~
11
12
13
14
136.
15
16
137.
Above the fourth and fifth options—the “End on [date]” and “End Now”
17
options—Amazon also added a warning icon and text that states “[b]y cancelling, [consumers]
18
will no longer be eligible for [their] unclaimed Prime exclusive offers.” See Attachment Q, at 5.
19
138.
The fourth option, “End on [date],” turned off Prime’s auto-renew feature. It did
20
not immediately cancel the consumer’s membership. Instead, the membership would end when
21
the current billing cycle concluded, and the consumer would not receive a refund. See
22
Attachment Q, at 5.
23
COMPLAINT
Case No. _:__-cv-_____
50
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 51 of 87
1
139.
The fifth and final option, “End Now,” immediately cancelled a consumer’s
2
Prime membership (and Amazon refunded a pro-rated amount for the balance of the billing
3
cycle). Thus, only one of the five options presented immediately cancelled a consumer’s Prime
4
membership. See Attachment Q, at 5.
5
Ca -eel yo
Prime -- m -ushlp:
6
1
7
s ie
rP
e
lP
8
9
10
End
11
12
13
140.
Therefore, to complete the Iliad Flow and cancel a Prime membership, the
14
consumer needed to click a minimum of six times from Amazon.com: Prime Central
15
“Manage Membership” “End Membership” “Continue to Cancel” “Continue to Cancel”
16
“End Now.” See Attachment Q.
17
141.
Amazon limited refunds available through the Iliad Flow to one monthly charge,
18
although Amazon did not disclose this to subscribers entering the flow. Consequently, a
19
Nonconsensual Enrollee who discovered Prime charges after a few months could not obtain a
20
full refund online.
21
22
23
COMPLAINT
Case No. _:__-cv-_____
51
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 52 of 87
1
3
-
4
Flow on desktop, the Iliad Flow on mobile was also difficult for consumers to locate and
5
presented a complex array of options across multiple pages. Cancelling via the Iliad Flow on a
6
mobile device was an eight-page, eight-click minimum process.
2
142.
143.
7
The Iliad Flow was also accessible through a mobile device. Similar to the Iliad
On a mobile device, a consumer entered the Iliad Flow by 1) tapping on “My
8
Account,” 2) selecting “Manage Prime Membership” from a dropdown menu on the second
9
page, 3) selecting “Manage membership” on the third page, 4) selecting “Manage membership”
10
on the fourth page, and 5) selecting “End my Membership” on the fifth page. See Attachment R,
11
at 1-5.
12
144.
On the sixth page, the consumer seeking to cancel began the mobile equivalent of
13
the Iliad Flow. Specifically, on this page, Amazon presented benefits information similar to the
14
desktop Iliad Flow, and stated at the top of the page “[Name], thank you for being a member
15
with us. Take a look back at your journey with Prime.” See Attachment R, at 6. Amazon
16
included the same three options—“Keep My Benefits,” “Continue to Cancel,” and “Remind Me
17
Later”—although consumers had to scroll down to view them. None of these options ended the
18
Prime membership. Consumers who selected “Continue to Cancel” proceeded to a seventh page.
19
See Attachment R, at 6.
20
21
145.
On the seventh page, Amazon presented alternate payment options similar to
those in the desktop Iliad Flow: Amazon placed the three options at the bottom of the page in
22
23
COMPLAINT
Case No. _:__-cv-_____
52
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 53 of 87
1
the same order. See Attachment R, at 7. Pressing “Continue to Cancel” did not end the
2
membership. It took the consumer to an eighth and final page. See Attachment R, at 7.
146.
3
On the eighth and final page, Amazon presented five buttons. The first three were
4
“Pause on [date],” “Keep My Membership,” and “Remind Me Later.” The consumer had to
5
scroll down to view the fourth and fifth. The fourth (“End on [date]”) turned off auto-renew, but
6
did not immediately cancel, and consumers who chose this option did not receive a refund. Only
7
the fifth and final button (“End Now”) immediately cancelled the membership. Amazon
8
refunded consumers who pressed this button a pro-rated amount for the balance of the monthly
9
billing cycle. See Attachment R, at 8.
147.
10
Amazon designed the Iliad Flow (both desktop and mobile) to inform consumers
11
about a) Prime benefits they would lose by cancelling Prime, and b) alternative payment methods
12
available to them to keep Prime.
148.
13
Amazon did not design the Iliad Flow to be simple or easy for consumers. The
14
Iliad Flow inhibits or prevents many consumers who intend to cancel from cancelling their
15
membership.
16
149.
17
18
19
20
21
-
22
23
COMPLAINT
Case No. _:__-cv-_____
53
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 54 of 87
The
1
2
150.
for the Prime Enrollment Flow
Although consumers can enroll in Prime through many entry points, a
-
3
prospective Prime members begin subscriptions by enrolling in free trials that Amazon offers
4
during its ecommerce shopping checkout process.
5
6
7
151.
8
9
10
152.
11
153.
12
13
14
15
154.
16
17
18
19
155.
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
54
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 55 of 87
1
156.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
COMPLAINT
Case No. - --cv-
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
55
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 56 of 87
1
2
3
4
5
6
7
8
16 1.
9
11
12
13
14
15
Amazon's Knowledge of Nonconsensual Enrollment
16
17
163 .
Amazon knows that Nonconsensual Emolhnent is widespread.
18
19
20
21
22
23
COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
56
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 57 of 87
1
2
3
4
5
6
and well-understood at Amazon
7
8
9
11
12
13
166.
fu fact,
, consumers do not always carefully study their credit
14
card activity or notice an Amazon charge for Prime (especially when they are expecting other
15
Amazon charges for routine pm-chases).
16
17
When dissatisfied consumers call Amazon 's customer service to cancel their
18
167.
19
Prime membership,
20
21
22
23
COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
57
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 58 of 87
1
2
(a)
3
5
-
6
meaning that Amazon has charged them three times without consent.
7
(c)
8
meaning that Amazon has charged them six times without consent.
9
(d)
4
(b)
10
11
meaning Amazon has charged them once without consent.
168.
-
meaning that Amazon has charged them twelve times without consent.
Amazon
12
13
169.
14
15
16
17
18
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
58
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 59 of 87
1
170.
2
3
4
5
6
7
8
9
10
11
12
13
14
171.
Prime checkout enrollment flow
contains design elements that trick people into signing up.
15
16
17
18
19
20
21
172.
22
23
COMPLAINT
Case No. _:__-cv-_____
59
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 60 of 87
1
2
3
4
173.
5
6
7
8
9
Amazon’s
10
11
174.
•
Decision to
12
13
14
15
16
175.
17
18
19
20
176.
21
22
23
COMPLAINT
Case No. _:__-cv-_____
60
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 61 of 87
1
2
3
177.
4
5
6
178.
7
8
9
179.
10
11
12
13
14
15
180.
16
17
18
19
20
21
181.
22
23
COMPLAINT
Case No. _:__-cv-_____
61
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 62 of 87
1
2
3
4
5
182.
6
7
8
9
-
183.
-
184.
10
11
12
13
14
15
16
17
18
185.
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
62
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 63 of 87
1
2
3
4
5
6
7
186.
8
9
10
11
12
13
14
187.
15
Amazon’s
16
17
188.
•
Decision to
18
19
20
21
189.
22
23
COMPLAINT
Case No. _:__-cv-_____
63
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 64 of 87
1
2
3
190.
4
5
6
191.
7
8
9
10
11
192.
12
13
14
193.
15
16
17
18
19
20
21
194.
22
23
COMPLAINT
Case No. _:__-cv-_____
64
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 65 of 87
1
2
Amazon’s
3
4
195.
•
Decision to
5
6
7
8
9
10
11
12
13
196.
14
15
16
17
197.
18
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
65
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 66 of 87
1
2
198.
3
4
5
199.
6
7
8
200.
9
10
11
12
13
14
15
16
-
201.
202.
17
18
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
66
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 67 of 87
1
2
3
203.
4
5
6
204.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
67
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 68 of 87
1
205.
2
3
4
5
6
7
8
- •
Amazon’s
Decision to
206.
9
10
11
12
13
14
15
16
17
18
19
207.
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
68
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 69 of 87
1
208.
2
3
4
5
209.
6
7
8
9
10
11
210.
12
13
14
15
16
17
18
211.
19
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
69
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 70 of 87
1
2
3
4
5
6
213.
On March 16, 2021 , the FTC issued a CID to Amazon seeking info1mation
7
necessa1y to evaluate wheth er the Prime enrollment process and the Iliad Flow violated the
8
Restore Online Shoppers' Confidence Act ("ROSCA"), 15 U.S .C. §§ 8401-05 .
9
11
12
13
14
15
16
As discussed above, see Paragraphs 113 and 116, Amazon made
17
18
changes to the Iliad Flow in the United States in or about April 2023.
Manipulative Designs in the Checkout Enrollment and Iliad Flows
19
20
21
217.
The manipulative designs (sometimes called dark patterns) Amazon uses, or has
used, in its Prime enrollment flows and the Iliad Flow include the following elements:
22
23
COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
70
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 71 of 87
(a)
1
2
Forced Action. “Forced Action” is a design element that requires users to
perform a certain action to complete a process or to access certain functionality.
(i)
3
Amazon uses Forced Action in the
-
version of its Prime
4
enrollment flow, during which Amazon forces the consumer to choose whether to enroll in Prime
5
before allowing the consumer to complete her purchase. In fact,
6
knew that
, Amazon
.
7
(ii)
8
Amazon also uses Forced Action in its Iliad Flow by forcing the
9
consumer to proceed through multiple screens to cancel their subscription. The presence of
10
Forced Action complicates the Iliad Flow.
(b)
11
Interface Interference. “Interface Interference” is a design element that
12
manipulates the user interface in ways that privilege certain specific information relative to other
13
information.
(i)
14
Amazon uses Interface Interference in its Prime checkout
15
enrollment flow, most versions of which reveal the terms and conditions of Prime only once
16
during the purchase process, and then only in a small, easy-to-miss font. Amazon also uses
17
repetition and color to direct consumers’ attention to the words “free shipping” and away from
18
Prime’s price, which leads some consumers to enroll without providing informed consent.
(ii)
19
Amazon also uses Interface Interference in the Iliad Flow by
20
emphasizing options that divert the consumer from the flow without cancelling and by
21
employing warning icons near the option to cancel, which evokes anxiety and fear of loss in
22
consumers. The presence of Interface Interference complicates the Iliad Flow.
23
COMPLAINT
Case No. _:__-cv-_____
71
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 72 of 87
(c)
1
Obstruction (“Roach Motel”). “Obstruction,” also known as the “roach
2
motel” technique, is a design element that involves intentionally complicating a process through
3
unnecessary steps to dissuade consumers from an action.
(i)
4
Amazon uses Obstruction throughout its Prime checkout
5
enrollment flows by making the option to decline enrollment difficult to locate.
6
In fact, since at least 2018, Amazon has known that some consumers cannot find the less
7
prominent “No Thank You” link to decline enrollment.
(ii)
8
Amazon also uses Obstruction in its Iliad Flow by: (1) making the
9
ingress to the Iliad Flow difficult for consumers to locate; and (2) forcing consumers who have
10
already expressed an intent to cancel by locating and entering the Iliad Flow to view marketing
11
and reconsider options other than cancellation. The presence of Obstruction complicates the
12
Iliad Flow.
13
14
(d)
Misdirection. “Misdirection” is a design element that focuses a
consumer’s attention on one thing to distract from another.
(i)
15
Amazon uses Misdirection in its Prime checkout enrollment flow
16
by presenting asymmetric choices that make it easier to enroll in Prime than not. Additionally,
17
certain versions of Amazon’s checkout enrollment flow offer consumers only a less prominent
18
blue link to decline Prime.
19
(ii)
20
21
22
23
COMPLAINT
Case No. _:__-cv-_____
72
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 73 of 87
1
2
3
Amazon also uses Misdirection in certain versions of the
4
5
Prime checkout enrollment flow
6
7
.
8
(iii)
9
Amazon also uses Misdirection in its Iliad Flow by presenting
10
consumers with asymmetric choices that make it easier to abandon an attempted Prime
11
cancellation than to complete it. In particular, Amazon uses attractors such as animation, a
12
contrasting color blue, and text to draw consumers’ attention to “Remind me later” and “Keep
13
my benefits” options rather than “Continue to Cancel.” Amazon further misdirects consumers
14
who have entered the Iliad Flow by presenting visually appealing options to perform acts other
15
than cancel, such as exploring the benefits of the subscription service (thereby exiting the Iliad
16
Flow). The presence of Misdirection complicates the Iliad Flow.
17
(e)
Sneaking. “Sneaking” is a design element that consists of hiding or
18
disguising relevant information, or delaying its disclosure. Amazon uses Sneaking by failing to
19
clearly and conspicuously disclose Prime’s terms and conditions during its enrollment checkout
20
flow, including its price and auto-renew attribute. Amazon also employs Sneaking by failing to
21
show Prime’s price or its auto-renewal feature in the consumer’s cart.
22
23
COMPLAINT
Case No. _:__-cv-_____
73
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 74 of 87
(f)
1
2
Confinnshaming. "Confnmshaming" is a design element that uses
emotive wording around th e disfavored option to guilt users into selecting the favored option .
3
4
5
6
-
7
8
9
Amazon used - confmnshaming despite
11
-
12
13
14
Amazon's Other Subscription Programs Have Similar Features
218.
Amazon operates other subscription services including Audible (audiobooks an d
15
podcasts), Kindle Unlimited (eBooks and digital media), Amazon Music Unlimited (streaming
16
music), and Subscribe & Save (regularly-scheduled delive1y of consumer goods). These other
17
subscription services also use similar manipulative design elements that trick consumers into
18
signing up an d thwaii their cancellation attempts.
19
219.
20
21
22
23
COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
74
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 75 of 87
220.
1
2
3
4
5
6
7
8
9
-
.
Amazon’s Misuse of
221.
Amazon and its executives, including Lindsay, Grandinetti, and Ghani,
10
:
11
12
-
(a)
Amazon and its executives, including Lindsay, Grandinetti, and Ghani,
13
14
15
16
-
. Amazon and its leadership
17
18
19
20
21
(b)
Amazon and its executives, including Lindsay and Ghani,
22
23
COMPLAINT
Case No. _:__-cv-_____
75
-
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 76 of 87
1
2
3
4
(c)
5
Amazon and its executives, including Lindsay, Grandinetti, and Ghani,
6
7
8
9
11
222.
Amazon, Lindsay, Grandinetti, and Ghani
12
13
14
15
16
17
18
19
20
21
22
23
COMPLAINT
Case No. - :- -cv-- -
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
76
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 77 of 87
Amazon’s Other Attempts to Delay the Commission’s Investigation
1
2
225.
On March 16, 2021, the Commission issued a CID to Amazon seeking
3
information regarding the enrollment and cancellation practices associated with Prime. The CID
4
directed Amazon to respond by April 15, 2021.
5
6
226.
Amazon has over 1.5 million employees—i.e., potential document custodians—
7
and its internal communications are replete with acronyms and other jargon—i.e., potential
8
search terms—not readily identifiable to outsiders. Accordingly, as with any discovery process,
9
the Commission had to, and did, rely on Amazon to participate in good faith in the discovery
10
planning process, including by identifying appropriate custodians and search terms.
11
227.
12
Amazon’s counsel assured the FTC’s counsel that,
13
Amazon’s counsel also told the FTC’s counsel
14
These assurances are consistent with any opposing counsel’s obligation to
15
16
engage in good faith discovery planning. As detailed below, however, Amazon did not follow
17
through on these assurances,
18
19
20
228.
In the context of the customary need to rely on opposing counsel to act in good
faith, Amazon counsel’s significant experience working on FTC investigations,
22
23
-
the massive amount of potential document custodians and
21
search terms (many of which were unknowable to the Commission), and
COMPLAINT
Case No. _:__-cv-_____
77
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 78 of 87
1
assurances
2
Amazon to provide—in the first instance—a sufficient response to the CID, including reasonable
3
search terms and custodians, to enable the Commission to fairly evaluate Amazon’s Prime
4
enrollment and cancellation practices. However, the Commission always reserved its right to ask
5
for additional responsive information and additional search terms and custodians.
229.
6
throughout the Subject Period, the Commission agreed to rely on
Accordingly, during the Subject Period, in response to Amazon’s assurances
the Commission
7
8
I
temporarily accepted
9
10
11
12
230.
By March 14, 2022, one year later, Amazon had produced only a small amount of
13
material—fewer than
-
documents—
15
-
16
and former Amazon employees regarding the problems with Amazon’s Prime checkout
17
enrollment flow and the Iliad Flow. The Commission quickly ascertained that Amazon had
18
failed to disclose much of the now-leaked documents and information to the Commission,
19
despite the fact that at least some of it was responsive to the outstanding CID. Amazon withheld
20
the information
14
231.
On March 14, 2022, Business Insider published information leaked from current
21
22
23
COMPLAINT
Case No. _:__-cv-_____
78
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 79 of 87
1
2
3
4
5
-
232.
6
7
8
233.
Pursuant to its reservation of rights, on April 19, 2022, the Commission issued an
9
extensive follow-up demand for additional information. Amazon did not comply with this
10
demand,
11
234.
On June 30, 2022, the Commission issued an additional CID to Amazon as well
12
as CIDs to various current and former employees seeking documents and testimony. Amazon
13
also did not comply with the June 30, 2022 CID.
14
235.
Instead, on August 5, 2022, Amazon and certain individual CID recipients
15
(including executives Lindsay, Ghani, and Grandinetti) petitioned the Commission to quash the
16
June 2022 CIDs. On September 21, 2022, the Commission denied the petition in every material
17
respect. Three Commissioners noted with respect to one legal question Amazon raised as a basis
18
to delay or avoid providing testimony: “The issue raised by this dispute is just one of many
19
challenges facing FTC staff when pursuing complex investigations of targets that may perceive
20
benefits to prolonging discovery.” Although the Commission ordered Amazon and the
21
individual petitioners to fully comply, they did not.
22
23
COMPLAINT
Case No. _:__-cv-_____
79
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 80 of 87
1
-
236.
Amazon’s effort to delay the Commission’s investigation included
237.
Amazon largely failed to timely produce the documents the CIDs require.
2
3
4
5
6
7
8
Although Prime is the world’s largest subscription program, Amazon produced fewer than
10
-
11
documents before October 2022—eighteen months after the Commission’s initial CID.
9
12
documents during the entire two-year investigation. Small businesses routinely produce
more material to Commission investigators. Moreover, Amazon did not produce most of those
238.
Amazon’s
assurances described in Paragraphs 225 through 237
13
constituted intentional misconduct meant to delay the Commission’s investigation and this
14
Complaint. Furthermore, these
15
affirmatively concealed the causes of action asserted herein during the Subject Period.
16
Amazon’s wrongful conduct foreseeably caused, and did in fact cause, delay of the
17
Commission’s investigation.
18
239.
assurances misled the Commission and
At all times, the Commission acted diligently. Among other things, during the
19
Subject Period, the Commission reviewed material Amazon produced and provided feedback to
20
Amazon Counsel through correspondence and teleconferences. The Commission also made
21
supplemental requests and, to expedite Amazon’s response, demanded that the company accept a
22
timeline for its production.
23
COMPLAINT
Case No. _:__-cv-_____
80
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 81 of 87
1
240.
Amazon’s bad faith response to the Commission’s CID constitutes an
2
extraordinary circumstance beyond the Commission’s control. But for Amazon’s effort to
3
frustrate the Commission’s investigation, the Commission would have filed this action many
4
months earlier. Amazon’s
5
delayed the Commission’s investigation during the period from April 15, 2021 (the initial CID
6
return date) and March 14, 2022
7
8
9
241.
assurances described in Paragraphs 225 through 237
.
Amazon’s largely unsuccessful petition to quash delayed the Commission’s
investigation during the period of its pendency, from August 5, 2022 until September 21, 2022.
242.
Based on the facts and violations of law alleged in this Complaint, the FTC has
10
reason to believe that Defendant is violating, and is about to violate, laws enforced by the
11
Commission because Defendant has engaged in ROSCA violations repeatedly and knowingly for
12
years. Those violations are ongoing. Even if Amazon halts or has halted some problematic
13
conduct, Amazon has
14
15
243.
Additionally, until shortly before the Commission filed this Complaint, Amazon
16
used the Iliad Flow to persuade consumers to keep their Prime subscriptions. Amazon only
17
revamped Iliad in response to pressure from the Commission, and without such pressure—
18
including this lawsuit—Amazon would likely restore Iliad. Furthermore, the revamped
19
cancellation process still contains problematic elements because the cancellation process remains
20
difficult to locate on both desktop and mobile. Amazon still requires five clicks on desktop and
21
six on mobile for consumers to cancel from Amazon.com. And both flows still require
22
consumers to proceed through extraneous information unnecessary to the cancellation process
23
COMPLAINT
Case No. _:__-cv-_____
81
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 82 of 87
1
and presented solely to discourage cancellation. The continued presence of these problematic
2
elements illustrates that, although the form of the cancellation flow recently changed, Amazon’s
3
mindset has not.
4
244.
5
mechanisms as “
6
time.
7
245.
Indeed, Amazon considers changes to Prime enrollment and cancellation
” decisions, meaning that those changes can be undone at any
Amazon is one of the world’s largest and most well-resourced companies. It has
8
extensive legal resources including in-house and outside counsel with expertise in the FTC Act,
9
ROSCA, and the company’s other consumer protection obligations. Amazon embedded in-
10
house counsel within the Prime Organization, and key decisionmakers Lindsay, Ghani, and
11
Grandinetti
12
13
14
246.
Accordingly, Amazon has actual knowledge or knowledge fairly implied on the
15
basis of objective circumstances that its actions are unfair or deceptive and are prohibited by
16
ROSCA.
VIOLATIONS OF THE FTC ACT
17
18
19
20
21
247.
Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts
or practices in or affecting commerce.”
248.
Acts or practices are unfair under Section 5 of the FTC Act if they cause or are
likely to cause substantial injury to consumers that consumers cannot reasonably avoid
22
23
COMPLAINT
Case No. _:__-cv-_____
82
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 83 of 87
1
themselves and that is not outweighed by countervailing benefits to consumers or competition.
2
15 U.S.C. § 45(n).
3
COUNT I
4
Unfairly Charging Consumers Without Consent
5
6
7
249.
In numerous instances, as described in Paragraphs 2 through 224 above,
Defendant has charged consumers without their express informed consent.
250.
Defendant’s actions cause or are likely to cause substantial injury to consumers
8
that consumers cannot reasonably avoid themselves and that is not outweighed by countervailing
9
benefits to consumers or competition.
10
11
12
13
251.
Therefore, Defendant’s acts or practices as set forth in Paragraph 249 constitute
unfair acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45(a), (n).
VIOLATIONS OF THE RESTORE ONLINE SHOPPERS CONFIDENCE ACT
252.
In 2010, Congress passed the Restore Online Shoppers’ Confidence Act, 15
14
U.S.C. §§ 8401-05, which became effective on December 29, 2010. Congress passed ROSCA
15
because “[c]onsumer confidence is essential to the growth of online commerce. To continue its
16
development as a marketplace, the Internet must provide consumers with clear, accurate
17
information and give sellers an opportunity to fairly compete with one another for consumers’
18
business.” Section 2 of ROSCA, 15 U.S.C. § 8401.
19
253.
Section 4 of ROSCA, 15 U.S.C. § 8403, generally prohibits charging consumers
20
for goods or services sold in transactions effected on the Internet through a negative option
21
feature, as that term is defined in the FTC’s Telemarketing Sales Rule (“TSR”), 16 C.F.R.
22
§ 310(w), unless the seller: (a) clearly and conspicuously discloses all material terms of the
23
COMPLAINT
Case No. _:__-cv-_____
83
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 84 of 87
1
transaction before obtaining the consumer’s billing information; (b) obtains the consumer’s
2
express informed consent before making the charge; and (c) provides simple mechanisms to stop
3
recurring charges. See 15 U.S.C. § 8403.
4
254.
The TSR defines a negative option feature as: “in an offer or agreement to sell or
5
provide any goods or services, a provision under which the consumer’s silence or failure to take
6
an affirmative action to reject goods or services or to cancel the agreement is interpreted by the
7
seller as acceptance of the offer.” 16 C.F.R. § 310.2(w).
8
9
10
255.
As described in Paragraphs 2 through 224, Defendant has created and manages
several negative option features as defined by the TSR, 16 C.F.R. § 310.2(w), including Prime.
256.
Pursuant to Section 5 of ROSCA, 15 U.S.C. § 8404(a), and Section 18(d)(3) of
11
the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of ROSCA constitutes a violation of a rule under
12
section 18 of the FTC Act, 15 U.S.C. § 57a, and constitutes an unfair or deceptive act or practice
13
in or affecting commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
14
257.
Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A), as modified by
15
Section 4 of the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461, as
16
amended, and as implemented by 16 C.F.R. § 1.98(d), authorizes this Court to award monetary
17
civil penalties of up to $50,120 for each violation of ROSCA, 16 C.F.R. § 1.98(d).
18
COUNT II
19
Violation of ROSCA—Inadequate Disclosures
20
21
258.
In numerous instances, in connection with charging consumers for goods or
services sold in transactions effected on the Internet through a negative option feature, as
22
23
COMPLAINT
Case No. _:__-cv-_____
84
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 85 of 87
1
described in Paragraphs 2 through 224 above, Defendant failed to clearly and conspicuously
2
disclose all material terms of the transaction, including the price of Prime, its auto-renewal
3
provision, and cancellation requirements, before obtaining the consumer’s billing information.
4
259.
Defendant’s practices as set forth in Paragraph 258 are violations of Section 4 of
5
ROSCA, 15 U.S.C. § 8403(1), and are therefore violations of a rule promulgated under Section
6
18 of the FTC Act, 15 U.S.C. § 57a, 15 U.S.C. § 8404(a), and therefore constitute an unfair or
7
deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
8
9
260.
Defendant committed the violations set forth in Paragraph 258 with the
knowledge required by Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A).
10
COUNT III
11
Violation of ROSCA—Nonconsensual Enrollment
12
261.
In numerous instances, in connection with charging consumers for goods or
13
services sold in transactions effected on the Internet through a negative option feature, as
14
described in Paragraphs 2 through 224 above, Defendant failed to obtain the consumer’s express
15
informed consent before charging the consumer’s credit card, debit card, bank account, or other
16
financial account for the transaction.
17
262.
Defendant’s practices as set forth in Paragraph 261 are violations of Section 4 of
18
ROSCA, 15 U.S.C. § 8403(2), and are therefore violations of a rule promulgated under Section
19
18 of the FTC Act, 15 U.S.C. § 57a, 15 U.S.C. § 8404(a), and therefore constitute an unfair or
20
deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
21
22
23
263.
Defendant committed the violations set forth in Paragraph 261 with the
knowledge required by Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A).
COMPLAINT
Case No. _:__-cv-_____
85
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 86 of 87
1
COUNT IV
2
Violation of ROSCA—Failure To Provide Simple Cancellation Mechanism
3
264.
In numerous instances, in connection with charging consumers for goods or
4
services sold in transactions effected on the Internet through a negative option feature, as
5
described in Paragraphs 2 through 224 above, Defendant fails to provide simple mechanisms for
6
a consumer to stop recurring charges for the good or service to the consumer’s credit card, debit
7
card, bank account, or other financial account.
8
265.
Defendant’s practices as set forth in Paragraph 264 are violations of Section 4 of
9
ROSCA, 15 U.S.C. § 8403(3), and are therefore violations of a rule promulgated under Section
10
18 of the FTC Act, 15 U.S.C. § 57a, 15 U.S.C. § 8404(a), and therefore constitute an unfair or
11
deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
12
13
266.
Defendant committed the violations set forth in Paragraph 264 with the
knowledge required by Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A).
CONSUMER INJURY
14
15
Consumers are suffering, have suffered, and will continue to suffer substantial injury as a
16
result of Defendant’s violations of the FTC Act and ROSCA. Absent injunctive relief by this
17
Court, Defendant is likely to continue to injure consumers and harm the public interest.
PRAYER FOR RELIEF
18
19
Wherefore, Plaintiff requests that the Court:
20
A.
21
Enter a permanent injunction to prevent future violations of the FTC Act and
ROSCA by Defendant;
22
23
COMPLAINT
Case No. _:__-cv-_____
86
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1 Filed 06/21/23 Page 87 of 87
1
B.
Award Plaintiff monetary civil penalties from Defendant for every violation of
2
ROSCA;
3
C.
Award monetary and other relief within the Court’s power to grant; and
4
D.
Award any additional relief as the Court determines to be just and proper.
5
Respectfully submitted,
6
7
Dated: June 21, 2023
8
By: /s/ Jonathan Cohen
JONATHAN COHEN (DC Bar #483454)
9
By: /s/ Olivia Jerjian
OLIVIA JERJIAN (DC Bar #1034299)
10
11
By: /s/ Thomas Maxwell Nardini
THOMAS MAXWELL NARDINI (IL Bar #
6330190)
12
13
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
14
15
(202) 326-3320; emendelson@ftc.gov (Mendelson)
(202) 326-2551; jcohen2@ftc.gov (Cohen)
(202) 326-2749; ojerjian@ftc.gov (Jerjian)
(202) 326-2812; tnardini@ftc.gov (Nardini)
16
17
By: /s/ Colin D. A. MacDonald
Colin D. A. MacDonald (WSBA # 55243)
Federal Trade Commission
915 Second Ave., Suite 2896
Seattle, WA 98174
(206) 220-4474; cmacdonald@ftc.gov (MacDonald)
18
19
20
21
ATTORNEYS FOR PLAINTIFF
FEDERAL TRADE COMMISSION
22
23
By: /s/ Evan Mendelson
EVAN MENDELSON (DC Bar #996765)
COMPLAINT
Case No. _:__-cv-_____
87
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
(202) 326-3320
Case 2:23-cv-00932 Document 1-1 Filed 06/21/23 Page 1 of 1
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Case 2:23-cv-00932 Document 1-15 Filed 06/21/23 Page 2 of 8
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Case 2:23-cv-00932 Document 1-15 Filed 06/21/23 Page 8 of 8
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Case 2:23-cv-00932 Document 1-16 Filed 06/21/23 Page 1 of 1
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Case 2:23-cv-00932 Document 1-17 Filed 06/21/23 Page 5 of 6
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save $40.88 over 12 months by switching to annual payments
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Case 2:23-cv-00932 Document 1-17 Filed 06/21/23 Page 6 of 6
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Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 1 of 11
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Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 4 of 11
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Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 5 of 11
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Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 6 of 11
Membership Sharing
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Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 7 of 11
< Sack to m.in.ige yo1-1r Prime membership
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16
Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 8 of 11
• Bade to manoge )'Our Prime member:.hlp
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Continue to Carn:el
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17
Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 9 of 11
, Bade to manage your Prime membership
llllllwe·re sorry to see you go,
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lten1s tJtd to your Prime membersllip wilt be
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18
Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 10 of 11
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Case 2:23-cv-00932 Document 1-18 Filed 06/21/23 Page 11 of 11
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Case 2:23-cv-00932 Document 1-19 Filed 06/21/23 Page 1 of 7
ATTACHMENT S
Case 2:23-cv-00932 Document 1-19 Filed 06/21/23 Page 2 of 7
how to cancel membership
how do i cancel my prime membership
how to cancel prime membership immediat ...
how to cancel audible membership
how to cancel memberships and subscriptions
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How to cancel member5hip?
To canc el your Prime membership, visit End Your
Amazon Prime MembershiR, then select End
Member5hip. Paid members who haven't used their
benefits are eligible for a full ref und of the current
membership period.
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Case 2:23-cv-00932 Document 1-19 Filed 06/21/23 Page 4 of 7
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< Back to Amazon Prime
End Your Amazon Prime
Membership
You can end your Prime membership by selecting
the End Membership butt on on th is page.
Ttilz
ltdimt.
Paid members who haven't used their
benefits are eligible for a full refund of
the current membership period. We'll
process the refund in three to five
business days.
End Your Prime Membership
•
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To end your Amazon Prime membership:
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Case 2:23-cv-00932 Document 1-19 Filed 06/21/23 Page 5 of 7
< Back to manage your Prime membership
•
thank you for being a
member with us. Take a look back
at your journey with Prime.
You still have 20 days left to enjoy your
Prime benefits until the next billing
cycle
Your benefit usage
PRIME BENEFITS USED:
PAST 12 MONTHS I PAST 30 DAYS
2
Packages sh ipped for free with
Prime Delivery. Shop today's
deals now!
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with Prime Video. You can start
watching videos by click ing here!
0
Songs listened to with Am azon
Music Prime. Start listening now!
Does not include Add-On subscription usage from Amazon Music
Unlimited Plon, ond Prime Video Rentals or channel subscriptions.
Kee p My Benefits
Continu e To Cancel
•
Rem in d Me Lat er
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|4
Case 2:23-cv-00932 Document 1-19 Filed 06/21/23 Page 6 of 7
< Back t o m anage yo ur Prime mem bershi p
•
•
save $40.88 over 12
months by switching to annual
payments
,,:,
I
I
Get all the benefits of Prime for
less
We'd like to offer you the chance t o enjoy all t he
benefits of Prime for only $139/year.
Switch to annual payments,
Are you a student?
Have an EBT card/receive government assistance?
By cli ck ing "Switch to annua l payments", your def ault
payment method or another available payment method on
file will be charged $139/yea r plus any applicable taxes.
Your Prime m embership wi ll continue until cancelled . You
will be refu nded $16.15 for your current plan.
Keep My Membership
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Amazon Prime Terms and Conditions
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TOP OF PAGE
Amazon .com
Your Orders
|5
Case 2:23-cv-00932 Document 1-19 Filed 06/21/23 Page 7 of 7
< Back to manage your Prime mem bersh ip
•
•
•
we're sorry to see you go.
Please confirm the cancellation of
you r membership.
Items tied to your Prime membership will
be affected if you pause your membership.
1.
By pausing, you will no longer be eligible for
your unclaimed Prime exclusive offers. Click
here to see your offers.
Pause on March 04, 2023
Your benefits access will continue until March 04,
2023. After that date, your billing and benefits will
be paused, and you will no longer be charged for
vour Primp mPmbPr~hio. U~P thP ouick-rP-iJmP
function anytime to regain access to your Prime
benefits. Learn More.
Keep My Membership
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Remind me three days before my membership
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End on March 04, 2023
You r benefits will cont inue until March 04,
2023, after which your card will not be charged.
OR
End Now
•
You r benefits will end immediately and you will
be refunded $16.15 for th e remain ing period of
your membership.
i amazon .com
|6
Case 2:23-cv-00932 Document 1-20 Filed 06/21/23 Page 1 of 9
ATTACHMENT T
Case 2:23-cv-00932 Document 1-20 Filed 06/21/23 Page 2 of 9
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cancel membership
cancel membership amazon prime now
cancel membership on my account
cancel membership and subscriptions
cancel membership today
cancel membership now
cancel membership to prime
cancel membership and subscriptions on my prime account
audible cancel membership
|1
Case 2:23-cv-00932 Document 1-20 Filed 06/21/23 Page 3 of 9
Kind le Unlimited
D ,nc
unlimited
Department
0
•
ALEXA'S ANSWER
How to ca ncel membership?
Books
Reference
Computers & Technology
Schoo ls & Teac hing
Kind le Store
Reference e Books
Kindle Short Reads
To cancel you r Prime member.;hip, visit End Your Amazon Pnme Me"'Jeersh1p, then select End Membership. Paid members who haven't
used their benefits a. re el igible tor a full refund of the current mem b()ii p period .
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How to Cancel Amazon Prime: All Your Quest ions About Amazon Prime Answered I Know Your Way Around
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by Luke Swagga I Dec 19, 2021
No nfiction
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|2
Case 2:23-cv-00932 Document 1-20 Filed 06/21/23 Page 4 of 9
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Case 2:23-cv-00932 Document 1-20 Filed 06/21/23 Page 6 of 9
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Case 2:23-cv-00932 Document 1-20 Filed 06/21/23 Page 9 of 9
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Case 2:23-cv-00932 Document 1-21 Filed 06/21/23 Page 1 of 7
ATTACHMENT U
Case 2:23-cv-00932 Document 1-21 Filed 06/21/23 Page 2 of 7
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Case 2:23-cv-00932 Document 1-21 Filed 06/21/23 Page 3 of 7
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|5
Case 2:23-cv-00932 Document 1-21 Filed 06/21/23 Page 7 of 7
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|6
Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 1 of 9
ATTACHMENT V
Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 2 of 9
|1
Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 3 of 9
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Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 4 of 9
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Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 5 of 9
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Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 6 of 9
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Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 7 of 9
Confirm your details
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Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 8 of 9
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Case 2:23-cv-00932 Document 1-22 Filed 06/21/23 Page 9 of 9
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