Three senior Amazon executives have been publicly named by US regulator in lawsuit over ‘duping’ users into Prime subscriptions
The US Federal Trade Commission (FTC) continues its pursuit of Amazon over allegations it “knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime.”
The FTC had made the allegations when it sued Amazon in June, when it accused the e-commerce giant of using “manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically-renewing Prime subscriptions.”
Now the FTC in an announcement has publicly named three senior Amazon executives, who it alleged took part in the “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.”
The FTC said its amended complaint “includes significant evidence redacted in initial complaint revealing extensive knowledge of Prime nonconsensual enrollment and complex cancellation issues.”
The three senior Amazon executives named in the amended complaint are as follows:
- Neil Lindsay, who served as senior vice president overseeing Prime and now serves on the company’s overall leadership team;
- Russell Grandinetti, who also serves as a senior vice president overseeing Prime;
- Jamil Ghani, a company vice president who 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.
The FTC’s amended complaint charges that Lindsay, Grandinetti, and Ghani 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 FTC alleged the executives were 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 chose not to act, according to the complaint.
The FTC 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.
As 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, the FTC alleged.
Amazon also created an allegedly labyrinthine cancellation process for Prime that the company called “Iliad,” the name of Homer’s epic about the long, arduous Trojan War, the FTC stated.
While Amazon – 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 in place for years, the US regulator alleged.
The complaint alleges that Amazon and its leadership – including Lindsay, Grandinetti, and Ghani – slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes would hurt Amazon’s profits.
The FTC made the following unredacted allegations in its amended complaint:
- Excerpts from an Amazon document that uses the term “misdirection” to 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 used by the company to force consumers into the complex Iliad cancellation flow, such as a company policy that 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.
- Findings highlighted in a company newsletter that 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 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 began raising this issue for company leaders, who refused to take action, as early as 2016.
- Details about Amazon’s attempts to delay and hinder the FTC’s investigation of these issues, including attempting to apply legal privilege to documents that were not privileged and concealing the existence of other relevant, damaging documents.
There has been no public response from Amazon at the time of writing.
The FTC complaint against Amazon over its Prime subscription process filed in June had been expected.
For example in August 2022 Amazon had accused the FTC of harassing its senior leadership, namely Jeff Bezos,and Andy Jassy, by asking them to testify in its investigation of the company’s Prime subscription service.
News of the FTC probe of Amazon Prime had been revealed in a FTC filing dated 5 August 2022, that was made public a couple of weeks afterwards.
However the FTC probe apparently began in March 2021.
Amazon had launched its Prime program back in 2005 and it has grown to become one of the most popular subscription services in the world, with more than 200 million members globally.
Prime generates billions of dollars for Amazon, and it gives users speedy deliveries and access to its streaming TV and music content.
In October 2019, the UK advertising watchdog, the ASA, ruled that Amazon had used a misleading payment page to get users to sign up for its Prime subscription service.