Amazon to pay billions to Prime customers after allegedly ‘tricking’ them
Image: Prathmesh T / Shutterstock.com
Online retail giant Amazon was in court again this week with the Federal Trade Commission (FTC) accusing the company of manipulating its customers. Specifically, the court case centered on tricks designed to entice users to take out Prime subscriptions and make it difficult for them to cancel, as reported by various news sites.
According to the FTC, these tricks include the fact that customers who have not yet subscribed to Prime can “conveniently” sign up for a Prime subscription with a single button click when completing a purchase. According to the allegation, it isn’t adequately clear that a Prime subscription is being taken out during the checkout process.
Amazon emphasized that this isn’t the case and that users also have the option of cancelling their subscriptions at any time. However, instead of continuing the lawsuit, Amazon agreed to a $2.5 billion settlement.
According to the court document (PDF), Amazon will pay out the majority of the settlement to Prime customers who were allegedly misled into their subscriptions. They are to receive a total of $1.5 billion, with the remaining $1 billion going to the US government. As this is a US lawsuit, it’s likely that only customers in the US will be paid out.
Amazon clears up Prime ambiguities
At the same time, Amazon is also committed to making changes to its Prime subscription—or rather in its advertising of it. Instructions for signing up and cancelling Prime subscriptions will likely be changed to make them clearer with less ambiguity. Also, during the checkout process, customers will no longer be allowed to instantly take out a Prime subscription in order to receive free shipping.
In addition, Amazon must provide existing Prime customers with more detailed information about how long their subscriptions are valid for, when their subscriptions will be renewed, and what amounts will be charged upon renewal. Users should also no longer have to click through three pages to cancel their Prime subscriptions.
In a trial brief, Amazon said that “occasional customer frustrations and mistakes are inevitable—especially for a program as popular as Amazon Prime,” but otherwise made no further comment.
This article originally appeared on our sister publication PC-WELT and was translated and localized from German.
Author: Laura Pippig, Staff Writer, PC-WELT
Laura is an enthusiastic gamer as well as a movie and TV fan. After studying communication science, she went straight into a job at PCMagazin and Connect Living. Since then, she has been writing about everything to do with PCs and technology topics, and has been a permanent editor at our German sister site PC-WELT since May 2024.
