On June 21, 2023, the Federal Trade Commission (FTC) filed a civil lawsuit against Amazon, alleging the use of “dark patterns” to deceive consumers into enrolling in automatically renewing Prime subscriptions. What is interesting is that the FTC filed this action. The Consumer Financial Protection Bureau (CFPB), as the name suggests, was created to protect consumers from financial abuse by companies. A major aspect of the CFPB’s mission is to protect consumers from unfair, deceptive, or abusive practices, and take action against companies that break the law. So, when the Federal Trade Commission (FTC)—a traditionally antitrust-focused governmental entity— took this action against Amazon for “duping” (i.e., deceiving) millions of consumers into enrolling in its Amazon Prime services, it begs the question: have the lines blurred between the CFPB and the FTC? Which governmental authority primarily governs consumer protection, and cracks down on deceptive trade practices, may be up for debate based on this recent action taken by the FTC.
In this lawsuit, the FTC claims that Amazon’s checkout process prominently promotes Prime enrollment while downplaying the associated costs. Additionally, the complaint asserts that canceling Prime is a cumbersome process, requiring users to navigate multiple pages. The allegations in the complaint focus on unauthorized charges, insufficient disclosures, involuntary enrollment in Prime, and the absence of a simple cancellation mechanism. In response to the allegations, Amazon has disputed the complaint’s factual and legal basis, emphasizing the popularity of Prime and expressing dissatisfaction with the lack of notice before the lawsuit.
This action aligns well with FTC Chair Lina Khan’s ongoing efforts to challenge deceptive web-based marketing tactics employed by consumer-facing businesses, citing concerns over impeded consumer choice and anti-competitive behavior. This FTC action also has broader implications for web-based marketing practices in the consumer financial services sector, as the FTC aims to scrutinize “dark patterns” and consumer retention strategies that may strengthen the dominance of major players in digital platforms. FTC Chair Lina M. Khan has a history of working closely with Rohit Chopra, a former FTC Commissioner. Following his tenure at the FTC, Chopra then led the consumer protection enforcement front at the CFPB as Director. This major lawsuit filed by the FTC against Amazon seems to blur the lines between antitrust and consumer protection enforcement. Perhaps this Amazon antitrust lawsuit lies at the cusp of CFPB’s consumer-facing enforcement regime and the FTC’s antitrust initiative. Whether the lawsuit filed by the FTC crosses the line into the CFPB’s territory of consumer protection is up for debate.