The FTC’s case against Amazon: ‘Dark patterns’ in online retail

The US Federal Trade Commission (FTC) claims retail giant Amazon employed “dark patterns” to sign up and retain Amazon Prime customers.

This article will look at what Amazon allegedly did wrong and consider what “dark patterns” look like in the consumer protection context.

The FTC’s enforcement rampage

The FTC is having a very busy 2023 so far, having brought at least nine actions against companies accused of violating consumer rights and privacy laws.

Earlier this year, the FTC announced three cases against health-related companies GoodRX, BetterHelp, and Premom.

Following that, the FTC took action against three companies accused of violating children’s privacy: Edmodo, Microsoft, and Amazon, in relation to its Alexa smart speaker.

Soon after, another FTC case against Amazon accused the company of surveilling consumers via its Ring doorbell cameras.

In the FTC present case—the third against Amazon in as many weeks—Amazon stands accused of tricking consumers into subscribing—or remaining subscribed—to Amazon Prime.

What are ‘dark patterns’?

Dark patterns are manipulative design techniques that aim to steer or trick a person (or “consumer”) towards making particular choices.

Dark patterns are often employed in cookie banners. For example, a website asks to install cookies on your device, and makes it easier to accept than reject this request.

In the cookie context, a cookie banner might allow you “accept” cookies with just one click. But if you want to “reject” cookies, you’ll have to navigate through several menus to find the option you want.

While we often associate dark patterns with privacy, they can also appear in other sectors, such as retail.

What did Amazon do wrong?

According to the FTC, Amazon used dark patterns to:

• Sign consumers up for Amazon Prime “without their consent”.
• Make it difficult for Amazon Prime customers to cancel their subscriptions.

FTC Chair Lina Khan describes these actions as “manipulative tactics (that) harm consumers and law-abiding businesses alike”.

Dark patterns during checkout

The FTC claims that Amazon attempted to trick consumers into signing up to Amazon Prime when making purchases on the Amazon website and app, including by using the following techniques:

• Offering Amazon Prime subscriptions “numerous times” throughout the checkout and (non-Prime) account signup process.
• Making it harder to find the option to buy a product without also subscribing to Amazon Prime.
• Deploying a button that consumers could use to both complete a purchase and simultaneously subscribe to Amazon Prime—without making it clear that the consumer would open an Amazon Prime subscription when they clicked the button.

According to the FTC, these techniques led to consumers being “nonconsensually enrolled” in Amazon Prime.

Dark pattern during the unsubscribe process

The FTC claims that Amazon engaged in “cancellation trickery” and “sabotaged” consumers’ attempts to cancel Amazon Prime subscriptions, including by using the following methods:

• Implementing a cancellation process with “multiple steps” designed to deter Amazon Prime customers from canceling.
• Making it hard for customers to find the option to cancel their Amazon Prime subscription.
• Redirecting a customer that attempted to cancel their subscription to “multiple pages” that would offer various deals to keep the customer on board, ask the customer to turn off auto-renewal rather than canceling, or encourage the customer not to cancel.

Amazon reportedly codenamed this cancelation process as “Project Iliad”—a reference to the Ancient Greek about the Trojan War. This reference is cited by the FTC as evidence Amazon’s unsubscribe process was deliberately labyrinthine and complex.

NB: Another Homeric poem, “The Odyssey” – wherein Odysseus overcomes various trials and challenges designed to stop him from reaching his goals—would arguably have been a more appropriate classical reference to describe an intentionally difficult customer journey.

Were Amazon’s ‘dark patterns’ illegal?

The FTC grounds its claims in two laws:

• The FTC Act, which prohibits any “unfair or deceptive” commercial practice that fulfills the following requirements:
  • The act causes or is likely to cause substantial injury to consumers.
  • Consumers cannot reasonably avoid the injury themselves.
  • The injury is not outweighed by any benefits to consumers or competition.
• The Restore Online Shoppers’ Confidence Act (ROSCA), which requires certain “third-party sellers” (including marketplaces such as Amazon) to:
  • Clearly disclose all the terms of a transaction before charging the consumer.
  • Not process a transaction without the consumer’s “express informed consent”.

The FTC argues that Amazon’s use of dark patterns violated these laws.

The FTC’s case has not been proven in court. Amazon told reporters that the FTC’s allegations are “false on the facts and the law”.