The FTC (Read: Lina Khan) Finally Sues Amazon in Landmark Antitrust Lawsuit #BreakUpBigTech

INTRODUCTION

Plaintiff, the Federal Trade Commission (“FTC” or “the Commission”), alleges:

1. Plaintiff brings this action under Sections 5(a), 5(m)(1)(A), 13(b), 16(a), and 19 of he Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(m)(1)(A), 53(b), 57b, and the Restore Online Shoppers’ Confidence Act, (“ROSCA”), 15 U.S.C. § 8404, which authorize the TC to seek, and the Court to order, permanent injunctive relief, restitution, civil penalties, and other equitable relief for Defendant’s acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and Section 4 of ROSCA, 15 U.S.C. § 8403.

SUMMARY OF CASE

2. For years, Defendant Amazon.com, Inc. (“Amazon”) has knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service (“Nonconsensual Enrollees” or “Nonconsensual Enrollment”). Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as “dark patterns” to trick consumers into enrolling in automatically-renewing Prime subscriptions

3. The Nonconsensual Enrollment problem was well known within Amazon. (Redacted). (Redacted).

4. In a draft memorandum (Redacted).

5. Some Amazon employees pushed the company executives responsible for Prime—including Neil Lindsay (“Lindsay”), Russell Grandinetti (“Grandinetti”) and Jamil Ghani (“Ghani”)—to address Nonconsensual Enrollment and make changes so that Amazon would not be tricking its customers. Redacted

6. (Redacted) Amazon and its leadership—including Lindsay, Grandinetti, and Ghani—slowed, avoided, and even undid user experience changes that they knew would reduce Nonconsensual Enrollment because those changes would also negatively affect Amazon’s bottom line. (Redacted)

7. For years, Amazon also knowingly complicated the cancellation process for Prime subscribers who sought to end their membership. Under significant pressure from the Commission—and aware that its practices are legally indefensible—Amazon substantially revamped its Prime cancellation process for at least some subscribers shortly before the filing of this Complaint. However, prior to that time, the primary purpose of the Prime cancellation process was not to enable subscribers to cancel, but rather to thwart them. Fittingly, Amazon named that process “Iliad,” which refers to Homer’s epic about the long, arduous Trojan War. Amazon designed the Iliad cancellation process (“Iliad Flow”) to be labyrinthine, and Amazon and its leadership—including Lindsay, Grandinetti, and Ghani—slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes adversely affected Amazon’s bottom line.

8. As with Nonconsensual Enrollment, the Iliad Flow’s complexity resulted from Amazon’s use of dark patterns—manipulative design elements that trick users into making decisions they would not otherwise have made.