Uncle Sam names three Amazon execs as Prime suspects in subscription ripoff case

The US Federal Trade Commission (FTC) has named three senior Amazon.com staffers accused of approving tactics designed to confuse people into signing up for the online souk's Prime loyalty scheme, then making it hard for them to unsubscribe.

Neil Lindsay, former head of the Prime team; current boss Russell Grandinetti; and Prime VP Jamil Ghani were all named in an amended complaint in an ongoing court case brought by the FTC against Amazon that alleges the e-tail giant knowingly duped customers into signing up for Prime delivery service and deliberately made it hard for them to cancel a subscription.

The amended filing includes excerpts from an internal Amazon newsletter that states: "The issue of accidental Prime-sign ups is well documented." Prosecutors go on to allege that Amazon execs not only understood netizens were being signed up for Prime, but also created a "labyrinthine" cancellation process that it named "Iliad" – a name taken from an epic poem by Homer.

Despite internal warnings about the obtuse process, the Amazon execs declined to change the system for fear of causing a "shock" to the business plan.

As early as 2016, staff warned that the Prime sign-up process was "designed to mislead or trick users to make them do something they don't want to do, like signing up for a recurring bill."

The complaint, filed in a federal district court in western Washington state, claims Amazon tried 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."

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The case revolves around the "dark patterns" Amazon is said to have used to lure people into signing up for Prime – underhand webpage and app layout tricks designed to get people to sign up and pay for Prime and then making it hard to cancel the payments. Court documents [PDF] note that Neil Lindsay is now a key member of Amazon's management team advising on corporate strategy.

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According to the complaint against the tech giant, Amazon customer service representatives were instructed to put people into the epically unpleasant Iliad process to cancel subscriptions – despite being able to resolve such inquiries quickly. The filing claims Lindsay and others knowingly made the cancellation process more complicated than it needed to be to keep people paying, and in some cases even enrolled people who were not active Amazon buyers.

"Prime subscription fees account for $25 billion of Amazon's annual revenue. Approximately 70 percent of Amazon's revenue comes from American consumers," the complaint claims.

Companies making it easy to sign up for services and then making it very hard to cancel them is nothing new, but the FTC's complaint is aiming to fix the issue for Amazon and others.

The online souk had no comment at time of publication. ®