US agency sues Amazon for ‘misleading’ practices
The United States Federal Trade Commission (FTC) filed a lawsuit on Wednesday against Amazon, an online retailer based in Seattle, for deceptive business practices.
The FTC, an antitrust and consumer protection agency, says it has filed a lawsuit against Amazon in the US District Court in Seattle for using “manipulative, coercive, or misleading user interface designs, known as ‘obscure patterns’ to induce customers automatically renewing Prime subscriptions.”
Prime, which offers members discounts on products as well as free shipping, access to movies and music and other benefits, is a key revenue generator for Amazon. The subscription service has over 200 million members worldwide.
On average, a Prime membership in the US costs $139 (€127) annually.
What is Amazon accused of?
The FTC lawsuit claims that “Amazon knowingly misled millions of customers into unknowingly signing up for Amazon Prime.” continues to claim that Prime subscriptions were initiated without consumer consent and that Amazon has made it extremely difficult for consumers to opt out.
Watchdog has been investigating Amazon’s questionable subscription practices since March 2021.
FTC Chairman Lina Khan said: “Amazon has tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money.”
The FTC’s lawsuit is aimed at permanently preventing the company from continuing such practices, as well as imposing financial penalties against it.
It’s not the first time Amazon has faced unfair trade allegations.
Amazon, known as one of the top five technology companies in the world alongside Alphabet, parent company of Google, Apple, Meta (formerly Facebook) and Microsoft, was founded by Jeff Bezos in 1994.
It is the world’s largest e-commerce company with annual revenues of over $513 billion. Bezos has an estimated net worth of $125 billion and is the third richest man in the world.
Amazon has repeatedly faced allegations of tax evasion and anti-competitive behavior, as well as criticism over its collection of customer data and labor issues related to the poor treatment of employees.
js/rs (AFP, Reuters)
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.