FTC Adds Senior Executives That Allegedly Played Key Roles in Alleged Amazon Prime Enrollment Scheme

According to FTC lawyers, the agency has named three senior Amazon executives in an amended complaint in its case against the company for its alleged years-long effort to enroll consumers into its Prime program without their consent while knowingly making it difficult for consumers to cancel their Prime subscriptions.

Named in the amended complaint are an individual that served as senior vice president allegedly overseeing Prime and now serves on the company’s overall leadership team; an individual that also serves as a senior vice president overseeing Prime; and an individual company vice president that oversees the Prime subscription program.

In addition to naming these individuals, the amended complaint includes significant new details of Amazon’s alleged misconduct that were redacted in the original complaint, including the contents of internal company emails and messages that show the extent to which the company and its management team were purportedly aware of the misconduct.

The FTC’s amended complaint charges that the individuals were fully aware of the issues surrounding consumers being subscribed to Prime without their consent and then facing significant hurdles when trying to cancel.  The executives were allegedly informed by other Amazon employees in emails, meetings and presentations about these issues and encouraged to make changes to stop Amazon from tricking its customers, but the executives allegedly chose not to act, according to the complaint.

The complaint alleges that the company and its executives instead slowed, avoided and even reversed user experience changes that they knew would reduce nonconsensual enrollment because those changes would also negatively affect Amazon’s bottom line.  According to the FTC, one draft internal memo stated, Amazon decided “clarifying” the enrollment process was not the “right approach” because it would cause a “shock” to business performance.

Amazon also allegedly created a labyrinthine cancellation process for Prime that the company called “Iliad.”  While Amazon—purpotedly under pressure from the FTC—made some changes to its processes just before the agency’s initial complaint was filed, the Iliad cancellation flow was purportedly in place for years.  The complaint alleges that Amazon and its leadership slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes would hurt Amazon’s profits.

The unredacted complaint’s allegations also include:

• Purporeted excerpts from an Amazon document that uses the term “misdirection” to allegedly refer to the company’s practice of forcing consumers to find a small blue text link to make a purchase without joining Prime, while using a far more prominent button saying “Get FREE Two-Day Shipping” that actually enrolls consumers in Prime.
• Information about tactics allegedly used by the company to force consumers into the complex Iliad cancellation flow, such as a company policy that purportedly required Amazon customer service employees to direct consumers who called to cancel Prime to the Iliad flow online, even though customer service agents had the ability to process the cancellation.
• Alleged findings highlighted in a company newsletter that purpotedly said, “The issue of accidental Prime-sign ups is well documented” and acknowledging that Prime customers “sign[] up accidentally and/or [don’t] see auto-renewal terms.”
• Statements from Amazon employees allegedly acknowledging the company’s use of user flows “designed to mislead or trick users to make them do something they don’t want to do, like signing up for a recurring bill.”  Amazon employees purportedly began raising this issue for company leaders, who allegedly refused to take action, as early as 2016.
• Details about Amazon’s purported attempts to delay and hinder the FTC’s investigation of these issues, including allgedly attempting to apply legal privilege to documents that were not privileged and puportedly concealing the existence of other relevant, damaging documents.

The Commission vote authorizing the staff to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the Western District of Washington.