Keep it Simple
Amazon, an American technology company, is no stranger to the Federal Trade Commission (FTC), its role, and the way it has recently been carrying out its responsibilities. Antitrust action and allegations of anticompetitive behavior have haunted Amazon as the company grows and expands its offerings for consumers. While the court of public opinion clearly values what Amazon provides, a federal court and the FTC have been fixated on vague definitions over market realities.
In 2023 the FTC filed suit against Amazon, alleging that the company was tricking consumers into using its “Prime” tier of services. The FTC cited a law mandating that companies gain consent from their customers for subscriptions and provide “simple” cancellation methods. What qualifies as “simple” is left up to the company, and cancellation methods vary greatly. The lawsuit used the language of “dark patterns” to describe Amazon’s subscription practices—an imprecise accusation of not living up to an imprecise standard.
Last week, the two-year legal dispute between the FTC and Amazon concluded with a record breaking $2.5 billion settlement, the largest civil penalty in a case involving FTC rule violation. While Amazon will live to see another day (and doubtless other lawsuits), the punitive techniques of the FTC and its impact on American companies and consumers deserve attention.
Excessive government intervention in the free market undermines consumer choice. When the lawsuit was first launched, Reason Magazine reported that it takes just six clicks to cancel a prime subscription. The article’s author put this into the context of the free market, saying, “The ideal number of clicks to cancel an online subscription may be four or five instead of six, but we don’t need the government to make that decision.” People clearly enjoy Amazon and its Prime services, and those who don’t can take their six clicks to other online retailers or streaming platforms. When the FTC constructs complicated arguments about “dark patterns,” they are undermining the discernment and preferences of consumers who are intentionally choosing Amazon’s offerings from an array of other products in America’s competitive tech marketplace.
Furthermore, anyone who has recently tried to discontinue a movie/TV streaming service, a print magazine subscription, or a gym membership knows it can be a real pain. Why did the FTC choose to go after Amazon Prime, which is arguably the most well-known and transparent service from which to opt out? Because it’s big? Because it’s part of “Big Tech?”
When companies, technology or otherwise, have to make business decisions with not just the consumer, but a series of ambiguous regulatory standards in mind, innovation and service delivery suffer. There are existing laws to prevent deception, but the “simple” criteria for cancellation and the threat of a “dark patterns” lawsuit are not among them. The precedent set by this record-breaking settlement will undoubtedly have a chilling effect on the companies across America innovating the most—tech companies. Forget meeting the needs of the market or shoring up American tech dominance; have they been careful to not provoke the ire of the FTC lately?
If “simple” is truly the goal, the FTC should value market forces over excessive litigation. American companies thrive under clear definitions and straightforward rules, and the American consumer is entirely capable of discerning which subscription services are right for them. A playing field where the rules are unknown and the referees have a punitive agenda is no playing field at all.
Links to Learn More
Amazon is being forced to pay $2.5 billion for making it easier to sign up for Prime-Reason Magazine
FTC vs. Amazon Prime: Vague Standards Could Hurt Pro-Consumer Innovation – NetChoice
