Amazon Will Pay $2.5 Billion to Settle FTC Suit That Alleged ‘Dark Patterns’ in Prime Sign-Ups

Amazon has reached a settlement agreement with the Federal Trade Commission (FTC) to pay $2.5 billion to resolve allegations that the company used deceptive tactics to sign up customers for its Prime subscription service. The FTC accused Amazon of employing ‘dark patterns’ – manipulative design techniques that steer users towards actions they may not have intended – to make it difficult for users to cancel their Prime memberships.

According to the FTC, Amazon’s tactics included making it unclear that customers were signing up for a paid subscription, burying the terms of the subscription deep in the sign-up process, and making it excessively difficult for users to cancel their membership. The agency also alleged that Amazon failed to properly disclose that users would be automatically enrolled in Prime after signing up for a free trial.

The $2.5 billion settlement is the largest in FTC history and reflects the seriousness of the allegations against Amazon. As part of the agreement, Amazon has agreed to make changes to its Prime sign-up process to ensure that customers are not misled and have a clear understanding of the terms of their subscription. The company will also be required to provide notice to customers before charging them for a subscription and make it easier for users to cancel their memberships.

In a statement, Amazon said that it is pleased to have resolved the matter with the FTC and is committed to providing clear and transparent information to its customers. The company also noted that it has already made changes to its sign-up process to address the FTC’s concerns and will continue to work to improve clarity and transparency for users.

The settlement represents a significant victory for the FTC, which has been cracking down on deceptive practices in the tech industry. The agency has warned that companies that use dark patterns to deceive consumers will face consequences and has urged other companies to review their practices and ensure that they are not engaging in deceptive behavior.

Overall, the settlement underscores the importance of transparency and honesty in the digital marketplace and serves as a reminder to companies that they must be upfront with customers about the terms of their subscriptions and not use underhanded tactics to drive sign-ups.