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An Amazon worker moves boxes on Amazon Prime Day in the East Village of New York City, July 11, 2023. The Federal Trade Commission on Wednesday updated its complaint against Amazon for its "deceptive" Prime sign-up and cancellation processes, adding three senior executives as defendants. Top Amazon executives overseeing Prime downplayed employee concerns about members of the popular subscription program being enrolled without their consent, the amended complaint alleges. Subscription services revenue, which includes Prime memberships, totaled $9.8 billion in Amazon's most recent quarterly earnings report. Amazon executives and employees met in 2018 about "Project Lucent," where the primary objective was to discuss "how many Prime signups [is] Amazon .
Persons: Russell Grandinetti, Jamil Ghani, Neil Lindsay, Grandinetti, Lindsay, Andy Jassy's, Ghani, Tim Doyle, Doyle, Mark Zuckerberg, Meta, Zuckerberg Organizations: Amazon, Federal Trade Commission, Top Amazon, Lucent, FTC Locations: East, New York City, Amazon's, Arlington , Virginia
Insider's investigation revealed that Amazon knowingly duped consumers into Prime subscriptions. The suit was the result of an Insider investigation in early 2022. One of those letters, reviewed by Insider, said the FTC made a Civil Investigative Demand to Amazon in March 2021. A CID is a legal document enforceable in court that seeks documents or other information related to an FTC investigation. In April 2022, the FTC sent more correspondence about the issue to Amazon lawyers, according to the letter, which cited Insider's original story from March 2022.
Persons: Amazon, Bezos, Eugene Kim, Graham Starr, CIDs, Andy Jassy, Dave Clark, Doug Herrington, Russ Grandinetti, Greg Greeley Organizations: Federal Trade Commission, Amazon, FTC, CID, Bezos Locations: Washington, Amazon's
Here are the highlights:Amazon called the difficult cancellation process the "Iliad" in reference to Homer's epic poem, as Insider previously reported. The suit describes the Iliad process as "Prime's Four-Page, Six-Click, Fifteen-Option Iliad Cancellation Process" because it takes that many steps to cancel. Amazon has two ways to upsell Amazon Prime to customers: interstitials and non-interstitials. It's equally difficult to cancel Prime on a mobile device, involving an 8-page, 8-click minimum process, the FTC investigation found. Amazon failed to "provide simple mechanisms for a consumer to stop recurring charges" for the Prime membership.
Persons: Lindsay, Grandinetti, Ghani —, Interstitials, Eugene Kim Organizations: FTC, Amazon, Morning, Amazon Music, Commission, Prime
Amazon's Prime membership may have even fallen last year, according to new estimates by CIRP. The research firm tracks the number of individuals using Amazon Prime, rather than total paying households. "Prime membership has essentially stopped growing in the US, after many years of extremely fast growth, and then modest growth in the last two or three years," CIRP said. Amazon doesn't publicly disclose the exact size of its Prime membership program. In 2021, Amazon's then-CEO Jeff Bezos said it had "more than 200 million Prime members worldwide."
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