Page 5 - Kattison Avenue - Fall 2025 - Issue 15

FTC’s Landmark $2.5 Billion Amazon Settlement
Highlights Ongoing Focus on “Dark Patterns”

By Catherine O'Brien and Chris Cole

Three days into trial, Amazon agreed to pay $2.5 billion to consumers were led to believe they were subscribing only to
settle a Federal Trade Commission (FTC) lawsuit alleging that Prime Video, a lower-cost service, but were instead allegedly
the company misled millions of consumers into subscribing to enrolled in full Prime.
Amazon Prime and then made it unreasonably difficult for them The complaint further alleged that Amazon tricked consumers
to cancel in alleged violation of the FTC Act. The settlement is into signing up for Prime and then, once a consumer was
instructive for several reasons: (1) it represents the largest ever enrolled, Amazon made canceling Prime very hard. Documents
obtained by the Ferguson (GOP-led) FTC; (2) it serves as phase at trial described the cancellation process as the “Iliad Flow” —
one of FTC litigation against Amazon, with a monopolization case named after the famous Homer epic. Although such tactics are
to follow in the Western District of Washington; (3) it forms part relatively common in face-to-face sales transactions, the FTC
of a broader litigation campaign against the online retail giant has increasingly sought to help consumers avoid them. While
that includes state attorneys general and private class actions;
(4) it offers insight into how the FTC will interpret and apply its
jurisdiction over “difficult” cancellations, and it marks the first
prominent enforcement action in the agency’s ongoing campaign
against so-called “dark patterns,” allegedly manipulative design
practices that steer consumers into unintended transactions;
and (5) it illustrates how these issues may play out in court,
where employees’ and contractors’ emails featured prominently
in the FTC's case. According to a recent Law360 article, the deal
has been hailed by the current FTC as a landmark, while former
FTC officials are calling it an insufficient penalty.

The FTC Complaint and Trial
Evidence Against Amazon

The FTC first filed this case in 2023 during the Biden
administration. The FTC Chair at the time, Lina Khan, famously
attacked Amazon in a law review article she authored while in T.Schneider/Shutterstock.com
law school. The FTC’s 2023 complaint alleged that Amazon used
“manipulative, coercive, or deceptive” user interface designs to the allegations of fraud at sign-up were insubstantial, the
dupe millions of consumers into automatically renewing Prime evidence on cancellation practices proved far more compelling:
subscriptions. According to the complaint, Amazon’s checkout Amazon’s Prime cancellation process allegedly required
process repeatedly presented consumers with opportunities to consumers to navigate a four-page, six-click, fifteen-option
subscribe to Prime, while obscuring the option to decline. On sequence that included repeated diversions, such as discount
desktop, consumers were shown a prominent button to join offers or reminders of Prime benefits.
Prime, contrasted with a comparatively inconspicuous link to
continue the order without it. On mobile devices, disclosures According to an attorney from the FTC’s trial team, whenever
about price and auto-renewal were relegated to the bottom of Amazon ceased these practices, Prime sign-ups dropped,
the page and were viewable only by scrolling. In some instances, leading Amazon to quickly “roll back” the changes. During trial,

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