PRESS RELEASE: FTC Settles With Amazon Over Manipulative Subscription Practices Identified Years Ago by EPIC, Partner Orgs

WASHINGTON, D.C. — The Federal Trade Commission announced today that it has reached a settlement with Amazon over the retail giant’s Prime subscription traps, marking the final stage of an enforcement action launched under Chair Lina Khan in 2023. The FTC’s case against Amazon is based on manipulative design practices highlighted by EPIC (the Electronic Privacy Information Center), the Norwegian Consumer Counsel, and the Transatlantic Consumer Dialogue more than four years ago.

“Amazon’s long history of using manipulative design features forcing consumers to give up more money and personal data than they intend has, we hope, finally come to an end,” said Sara Geoghegan, EPIC Senior Counsel. “Today’s settlement underscores what consumers have long known: Big Tech’s attempt to take more money out of our pockets and to collect more of our personal information by trapping us in subscriptions is illegal and wrong.”

Though EPIC welcomed the news that the FTC will continue its focus on harmful subscription tactics under Chair Andrew Ferguson, the settlement stills fall short in key respects and calls attention to the current FTC’s broader regulatory failures. 

The settlement’s $2.5 billion in penalties and restitution represents only about 1% of Amazon’s total market capitalization—far short of Amazon’s ill-gotten gains from the Prime subscriptions it trapped consumers in. The settlement requires Amazon to provide consumers with a “simple mechanism” to cancel subscriptions but fails to define clearly what that means. And much depends on how scrupulously the oversight provisions of the settlement are carried out by the current FTC, which has a pattern of unilaterally disarming against Big Tech in its short tenure.

Today’s one-off enforcement action against Amazon also highlights the Ferguson Commission’s failure to restore the broadly popular click-to-cancel rule after it was vacated on dubious procedural grounds in July. The rule would have made it far easier for the FTC to crack down on businesses using subscription traps, and failing to reinstate it leaves the Commission without a critical enforcement tool.

EPIC has long advocated against the use of manipulative design practices online, particularly in the context of subscription cancelation. In 2021, EPIC filed an administrative complaint alleging that the very practices targeted in today’s settlement were unfair, deceptive, and in violation of the Restore Online Shoppers’ Confidence Act (ROSCA).

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About EPIC:

EPIC (the Electronic Privacy Information Center) is a 501(c)(3) non-profit established in 1994 to protect privacy, freedom of expression, and democratic values in the information age through advocacy, research, and litigation. For more than 30 years, EPIC has fought for robust safeguards to protect personal information.