Online Classes
Dark Patterns: Amazon–FTC Dispute
What was the Amazon–FTC dispute about?
The Federal Trade Commission (FTC) accused Amazon of tricking consumers into enrolling in its Prime subscription service and deliberately making the cancellation process difficult. These practices were described as “Subscription Traps”.
What is the Settlement amount and its breakdown?
Amazon agreed to pay $2.5 billion—of which $1 billion is a civil penalty and $1.5 billion will be refunded to an estimated 35 million affected customers.
Why is this settlement significant?
• It is the largest civil penalty in an FTC rule violation case.
• It is also the second-highest restitution award obtained by the FTC.
What changes must Amazon make after the settlement?
• Remove misleading buttons like “No, I don’t want Free Shipping.”
• Provide clear disclosures of Prime terms during enrollment.
• Offer easy cancellation options for customers.
What is the role of dark patterns in this case?
Dark patterns are deceptive design practices that manipulate user behavior. Amazon allegedly used them by nudging consumers into Prime subscriptions and obstructing cancellation. The case highlights global regulatory attention on digital consumer rights.
What is the financial impact on Amazon?
Prime generated $44 billion in subscription revenue in 2024. The $2.5 billion settlement equals just 5.6% of one year’s revenue, which analysts say will not affect Prime’s dominance but may force simplification of its processes.
What are critics saying?
Former FTC chair Lina Khan argued the settlement let Amazon “pay its way out” of a likely liability finding. Consumer groups see it as a warning to big tech against manipulative subscription designs.