Amazon Execs May Be Personally Liable For Tricking Users Into Prime Sign-Ups (arstechnica.com) 62
An anonymous reader quotes a report from Ars Technica: Yesterday, Amazon failed to convince a US district court to dismiss the Federal Trade Commission's lawsuit targeting the tech giant's alleged history of tricking people into signing up for Prime. The FTC has alleged that Amazon "tricked, coerced, and manipulated consumers into subscribing to Amazon Prime," a court order said, failing to get informed consent by designing a murky sign-up process. And to keep subscriptions high, Amazon also "did not provide simple mechanisms for these subscribers to cancel their Prime memberships," the FTC alleged. Instead, Amazon forced "consumers intending to cancel to navigate a four-page, six-click, fifteen-option cancellation process." In their motion to dismiss, Amazon outright disputed these characterizations of its business, insisting its enrollment process was clear, its cancellation process was simple, and none of its executives could be held responsible for failing to fix these processes when "accidental" sign-ups became widespread. Amazon defended its current practices, arguing that some of its Prime disclosures "align with practices that the FTC encourages in its guidance documents." But the judge apparently did not find Amazon's denials completely persuasive. Viewing the FTC's complaint "in the light most favorable to the FTC," Judge John Chun concluded that "the allegations sufficiently indicate that Amazon had actual or constructive knowledge that its Prime sign-up and cancellation flows were misleading consumers."
In his order (PDF), Chun also denied individual motions to dismiss from Amazon executives Russell Grandinetti, Neil Lindsay, and Jamil Ghani, who oversaw Prime operations. Executives had urged the court to dismiss the FTC's claims against them. They argued that the FTC "singled them out 'for an 'unprecedented sanction'" when the agency had "only recently started prosecuting companies for using 'dark patterns'" under Restore Online Shoppers' Confidence Act (ROSCA) and the FTC Act. They claimed that the FTC never alerted them to any wrongdoing before filing the lawsuit, so how could they have known they were violating the law? According to Chun, however, the FTC sufficiently alleged that each of these executives knew they were violating consumer protection laws when prioritizing profits over eliminating dark patterns triggering "accidental" or "nonconsensual" Prime sign-ups. Chun explained that executives may be "personally liable for corporate violations of the FTC Act if the individual 'participated directly in, or had the authority to control, the unlawful acts or practices at issue.'"
For example, when Lindsay -- who in 2016 had the "most responsibility for the Prime subscription program" -- was "asked about Amazon's use of dark patterns during the Prime enrollment process," Lindsay justified the dark patterns. "Lindsay explained that once consumers become Prime members -- even unknowingly -- they will see what a great program it is and remain members, so Amazon is 'okay' with the situation," Chun's order said. And when Grandinetti, who "oversaw the Prime subscription program" in 2018, was told that the sign-up process and auto-renew feature frustrated customers, he "vetoed any changes that would reduce enrollment." Because executives seemingly prioritized profits over reducing customer friction, the FTC alleged that reasonable customers got sucked into Prime without their consent. Sometimes customers understandably got confused by the "discrepancy in size, location, and color" of Amazon's disclosures, Chun suggested. Other times, confusion struck when Amazon tried to upsell customers on Prime at checkout -- pairing their enrollment with their other shopping experience.
In his order (PDF), Chun also denied individual motions to dismiss from Amazon executives Russell Grandinetti, Neil Lindsay, and Jamil Ghani, who oversaw Prime operations. Executives had urged the court to dismiss the FTC's claims against them. They argued that the FTC "singled them out 'for an 'unprecedented sanction'" when the agency had "only recently started prosecuting companies for using 'dark patterns'" under Restore Online Shoppers' Confidence Act (ROSCA) and the FTC Act. They claimed that the FTC never alerted them to any wrongdoing before filing the lawsuit, so how could they have known they were violating the law? According to Chun, however, the FTC sufficiently alleged that each of these executives knew they were violating consumer protection laws when prioritizing profits over eliminating dark patterns triggering "accidental" or "nonconsensual" Prime sign-ups. Chun explained that executives may be "personally liable for corporate violations of the FTC Act if the individual 'participated directly in, or had the authority to control, the unlawful acts or practices at issue.'"
For example, when Lindsay -- who in 2016 had the "most responsibility for the Prime subscription program" -- was "asked about Amazon's use of dark patterns during the Prime enrollment process," Lindsay justified the dark patterns. "Lindsay explained that once consumers become Prime members -- even unknowingly -- they will see what a great program it is and remain members, so Amazon is 'okay' with the situation," Chun's order said. And when Grandinetti, who "oversaw the Prime subscription program" in 2018, was told that the sign-up process and auto-renew feature frustrated customers, he "vetoed any changes that would reduce enrollment." Because executives seemingly prioritized profits over reducing customer friction, the FTC alleged that reasonable customers got sucked into Prime without their consent. Sometimes customers understandably got confused by the "discrepancy in size, location, and color" of Amazon's disclosures, Chun suggested. Other times, confusion struck when Amazon tried to upsell customers on Prime at checkout -- pairing their enrollment with their other shopping experience.
Just cancelled (Score:3)
Just cancelled my 5th or 6th free trial. I wait until I want something next day and then use it, always cancelling before I have to pay anything.
I might have kept it into next month to watch The Boys season 4, but when I tried Prime Video it gave an error message. Something about using a VPN, and sorry but I'm not disabling all my privacy stuff just for them. Their music thing at least loaded, but wouldn't play. I looked at "podcasts" but they all seemed to be streaming, you couldn't download them which was kind of the point of a podcast - to listen to on your famously WiFi-free iPod.
It's cheaper to just pay for next day delivery on the rare occasions when I need it. Worse still, Amazon Prime stuff is more expensive anyway so it's better to wait for a cheaper option if you can.
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I know there should be ads (I'm seeing noticeable skips), but I've yet to see one.
PSA: You might want to check your ublock setup if you're on the low tier and are seeing video ads
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Huh, I actually just used a VPN on prime to watch some shows in England. I was curious what different content I could see. Maybe the server I connected to is not blacklisted yet. Anyway, my friend has a pretty interesting strategy for streaming services: He only pays for one streaming service at a time, watches all the shows he's interested in and then cancels the subscription and picks a different streaming service the following month, rinse & repeat. If you want the added convenience of a streami
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I cancelled Prime a few months ago.
Since then I have done most of my shopping on eBay. I've found that usually the prices are cheaper than Amazon (sometimes a lot cheaper) and most of the time they come with free shipping.
I like eBay because it's mostly small businesses and it cuts out the Amazon middle man profit.
Re: Just cancelled (Score:2)
Ebay has commissions as well. Higher than Amazon on some items.
If you really want to cut the middleman, try craigslist. I find it hard with all the flakes on there, though.
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Yup, I have done a few free trials just for basic stuff I wanted to see. I did want to see more Doctor Who but it requires a premium subscription... In the older days it was indeed more difficult to cancel the Prime, and it was more obvious that you were subscribing in the first place. But I did get into the subscription page by surprise a few times because of the "do you want free shipping?" checkbox. Definitely it was trying to trap people.
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Ya, that's bad. I didn't get adds with my Fallout series, despite being on a free sub. It is bad enough getting ads on youtube, but at least it's free. To pay money and *still* get ads, or being asked to pay a premium for some shows, is too far for me.
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yikes, never post while chatting in a different window, this got attached to the wrong location.
Not the low hanging fruit (Score:1)
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I actually ended up abandoning my last Amazon purchase because I couldn't find a way to complete the checkout process without signing up for Prime. I kept saying I didn't want it, and it would loop back to getting me to agree to it again.
I could not figure it out. (Score:2)
I doubt there are many people who don't want prime and can't figure out how to cancel it.
I wanted to cancel prime, and I could not find it on Amazon's site. Not surprising. I had to have Google give me the link. Then I still had to click a dozen times across 4 web pages. I hope the FTC bakes their asses.
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My mom accidentally signed up for prime. She was buying a book and didn't uncheck a box. That's all it took.
Cancelling that required getting in a support queue and waiting for a phone call to explain the situation.
That is very much a dark pattern.
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I have definitely had to cancel Prime for my mother. She did not know why had subscribed and did not know that there was an upcoming paying due. She's very much in the habit of clicking on things she shouldn't - and all online web sites know very clearly that people will do this. Nobody creates a web site with the understanding that only tech and web savvy people will be visiting it. Amazon *knows* that they were confusing people, they even admitted to this, they just dispute that this is illegal. Or a
how could they have known they were violating the (Score:3, Interesting)
never alerted them to any wrongdoing before filing the lawsuit, so how could they have known they were violating the law?
It is just ridiculous that is a literally an argument. Even more so, that is a valid one when you are rich.
Re:how could they have known they were violating t (Score:4, Informative)
It's called mens rea [wikipedia.org] (guilty mind) and almost every crime is supposed to have that as a component. The real tragedy is not that the rich have basic legal rights, but that, increasingly, normal people do not.
So in this example, there's a crime (misleading customers), which without the standard mens rea component would not be a crime (confusing customers). Of course, they can know they're guilty without having been officially warned first.
They might be asking to be allowed to commit crimes plus have the FTC work for free as their legal compliance department, or might be claiming the law is so confusing that the only reasonable way to prove wilful non-compliance is by being warned first. This is somewhat undermined since they have recently been caught destroying company messages that they were specifically told to keep.
Dark patterns (Score:5, Informative)
When I buy something from Amazon (.de), during checkout there is often a banner asking if I don't want to not fail to join Prime. It changes from time to time, but it is *always* deliberately confusing. Usually, you are safe to ignore it, but I am pretty sure there was at least one time when I had to specifically uncheck an option to avoid joining.
It's a huge gray zone, of course, but actually tricking customers is illegal. It's time and past time that executives were not allowed to hide behind their corporation. Do something illegal, be personally liable. Let's have more of that, please.
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As long as it is clearly spelled out to be executives. What should not happen is anything that lets an executive blame-dump on an IC.
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Yup everyone up the chain of command should be responsible, plus a fine of 10x the criminal proceeds, so the shareholders notice too.
What I hate is the moment to moment price changes (Score:2)
They basically use tricks to maximize what they're going to get out of me for each purchase. It's a level of nickel and diming that wasn't possible until recently and it drastically contributes the price increases. They know what I buy and when I'm going to buy it and the exact maximum amount they can drag out
Re: What I hate is the moment to moment price chan (Score:2)
"It's a level of nickel and diming that wasn't possible until recently"
That's only on the web. This sort of thing has always been going on at brick and mortar retail. That's why coupons exist and why there is a premium on products depending on what else is around geographically.
The old school consumer might have to spend time looking around and then drive an extra 15 miles to get the best deal.
The modern consumer must use incognito and lookup historical prices and other strategies.
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There were some apartments near work that did this, as one temporary worker found out. He saw them refresh their web page to see that the rental price has changed.
Times were you'd maximize profit but also keep your customers happy. Because happy customers means more profits. Now days it seems they want to maximize profits and piss off the customers because screw those losers. It's a massive attitude change that the customer is seen as the annoyance. Except that the "viewer" for web sites are not actual
Kids too (Score:2)
Amazon supports kids' accounts with allowances and restricted settings and everything then encourages them to sign up for Prime with recurring billing even when the parents subscribe.
Those should all be refunded or a class action is going to ream them out.
Imagine the PR black eye.
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Amazon supports kids' accounts with allowances and restricted settings and everything then encourages them to sign up for Prime with recurring billing even when the parents subscribe. Those should all be refunded or a class action is going to ream them out.
Companies seldom get "reamed out" in such situations. They calculate the likely payouts beforehand and budget for them - often they are literally line items in a budget. They almost always come out ahead, and very seldom actually lose money.
Imagine the PR black eye.
In this day and age, such a "PR black eye" lasts all of 5 minutes and has an indiscernible effect on the bottom line. Companies the size of 'Zon simply don't care.
Re: Kids too (Score:2)
Companies the size of 'Zon simply don't care.
Which is why they have to go after the execs. In the federal lockup, everyone is the same size (sorry about that, Jeff).
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I'm all for going after the execs. The corporate liability shield, on its own, is responsible for a very large majority of the corporate wrongdoing our whole planet suffers from. Putting asses in jail cells - or even better, in chairs of the electric variety where appropriate - would go a long way toward making corporate responsibility something more than the punchline to its own joke.
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The corporate liability shield, on its own, is responsible for a very large majority of the corporate wrongdoing our whole planet suffers from.
That's not exactly what the liability shield is for. It protects the shareholders from the actions of the company. As an equity owner (below the threshold for controlling ownership) all I stand to lose is my initial investment in the enterprise. There never was a "corporate liability shield" that protected company officers.*
*Exceptions exist for certain areas of expertise like engineering. If your senior engineer signs off on a defective design, you (the CEO) can't be expected to understand the intricacies
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Execs have long used excuses that their job is to maximize profits, not to worry about the welfare, safety, or convenience of mere customers. Ie, the old "I was just doing my job" defense that only works in court if you're rich.
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Thanks for the correction. I guess what I meant to say boils down to the observation that a corporation DOES, at least in practice and in effect, shield its officers from liability. Corporations are merely fined for crimes which, if committed by an individual, would result in financial ruin and/or serious jail time. As far as I know, there have been no executives from companies such as Dow and Shell fined or imprisoned for some of the environmental crimes these companies have committed.
And there's the rub -
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Nah TPTB only cares about trans-whatever groomers, priests and corporations are OK
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Imagine the PR black eye.
As long as all of the competition is equally bad, nobody seems to care. Can't just decide they're all bad and treat them like it.
X keeps making me lie (Score:1)
When I block advertisers on Twitter (which the site makes reasonably convenient) I get a popup asking me to pay for premium to block all the ads, and I can either upgrade now or "maybe later". But no, there is in fact no chance that I will subscribe later. Also, I am doing them a favor since seeing their ads on Twitter at this time creates a negative association in my mind. Not that there was any chance I would do business with them anyway, since the vast majority of them are for some kind of cryptocurrency
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either upgrade now or "maybe later"
There are few things that trigger me harder than the "maybe later" instead of "no" bullshit. Yeah... maybe later I'll be a Chinese jet pilot.
Re: X keeps making me lie (Score:2)
Unfortunately there are few things I can say that trigger slashdot moderators as much as saying Elno isn't perfect
popcorn ! (Score:4, Insightful)
Now that is interesting news to follow.
Definitely massive use of dark patterns there. The cancel process is definitely made to just outright frustrate you, and whenever you order something from Amazon you need to take extra care not to accidentally sign up to Prime.
And good that they're going after the execs. It's time the corporate shield comes down a bit.
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That's not corporate shield. The corporate shield protects minority share investors, and is (usually reasonable). The policy of not charging the executives is because it's difficult, and it's an *implicit* policy, not a law. But it's a rather consistently acted on policy.
And, YES, it's definitely time that corporate executives were charged for the crimes they instigate or collude in.
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Acting like salesmen (Score:2)
"tricked, coerced, and manipulated consumers into subscribing to Amazon Prime"
Isn't tricking, coercing and manipulating just standard salesman tactics.
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lots of other shenanigans too (Score:2)
Ignorance of the law is no excuse (Score:4, Funny)
And in this case, 1000x so. As a trillion dollar company with an army of lawyers how could they not know what they were doing was illegal?
Bullshit.
I'm going to try that and see how it works for me as a little guy. "Your honor I did not know that 70 on the sign was a speed limit. I thought it was a lottery ticket number. The law is very unclear. I should just get a warning for doing 175. Why wasn't I informed I was committing a serious crime and helped to stop over a period of years?"
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There is no ignorance of the law at play here. None. These execs see it as a "cost of doing business." Their habitual pushing of legal boundaries is very deliberate.
Amazon Trickery (Score:3, Interesting)
About six months ago I made an order on Amazon for something I just couldn't find anywhere else (the only time I use Amazon now, maybe 2 to 3 times a year). Anyhow, after checkout and paying for my order a screen appeared stating that I signed up for Prime and to enjoy all the benefits. At no time during the checkout process did I knowingly or purposely sign up for Prime. I clicked on the "no thank you" in very tiny print. I clicked on free delivery just below the "try prime for free delivery" option. Or so I thought. Did my mouse move one pixel to close to the Prime option? Who knows. CANCELLING was a pain in the ass! I had to Google how to cancel Prime membership just to find a page on Amazon's site. Then I had to spend 30 minutes on the phone with a rep I could barely understand to cancel it. AMAZON SUCKS and they KNOW IT.
Re: Amazon Trickery (Score:2)
"the only winning move is not to play"
Do not order from Amazon ever.
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Ugh, I know, I do avoid Amazon at all costs when I can. I needed window rain guards for my car, a 2001 Mercury Sable LS. Every local shop I went to either didn't have them or know of a source to order them from. Even Amazon for the longest time didn't have that particular model available. Then one day when doing a search again Amazon had a single source in stock so I made the decision to get them. Sorry I did now with all the hassle I had to go through to cancel something I never signed up for. And to make
Executives? Being held accountable? In the USA? (Score:2)
I am speechless. It looks like the kid gloves are finally off. I am thinking that money will transfer hands and this will all go away, but actually pretending to have teeth is kind of a first. Ken Lay and Jeff Skilling are almost exceptions to that except that Skilling is out and partying it up again, so not too much teeth.
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Wait to see how it goes...or if we ever hear of a conviction. Or what the penalty was, and what bonus the executives get afterwards.
It would be nice if you were correct, but I'm not really optimistic.
Not as bad as Acorn.tv (Score:4, Informative)
I signed up for Acorn.tv some years ago. After a while, my ROku could no longer log in, so I went their website where I learned that they had increased the price and, if I wanted to continue, I had to accept the increased price.
I declined to accept the increased price, and foolishly assumed that they would stop billing me. Well, that was a bad assumption. Some time later, I realized that they were still billing me, so I initiated a series of disputes with my credit card company. Even that did not stop them billing me, so I went on their website again -- but could not log in to cancel.
I tried their support system, but did not receive responses. Eventually, I realized that their ignorant development team must have broken support for "plus-address" style email addresses. Eventually, I worked through this by using a non-plus-addresses email address to contact them and get them to search their customer database and remove me.
But, the fundamental issue is that, they put up the price, removing service from those who did not accept the new price, and kept billing.
Is this actual fraud? They were billing for services that they were not providing over an extended period. I would not be surprised if they are still billing some people who declined the increase.
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Britbox seems to have the better library anyhow?
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We have Britbox also.
Acorn has an interesting selection of dramas from Australia and New Zealand.
Absolutely! (Score:1)
This just means that (Score:2)
Personally, I think Amazon will win. I clicked through to some of the images that are being put forward as "evidence" that Amazon was doing something shady. Every single on of them amounted to "you know, you would get more from us if you sign up for Prime. Click here, and we'll discuss pricing".
That's called an up-sell. If it's illegal, then we need to shut down literally every single ecommerce websi
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Click here, and we'll discuss pricing
What I usually see signs you up with one click without even asking you to chose the payment method. It's a big yellow button, while there is no button to decline, just a small "No thanks" text link.
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the trial goes forward. Which is fine with me. Let it go through court and the judge/jury can decide.
You sure?
So they should go ahead then?
The judge and the FTC attorneys are going to be very relieved to hear about your decision.
Personally, I think you made a wise choice.
Awesome... (Score:2)
Always a battle with the Bezos demon. (Score:2)
Seriously? (Score:2)
cellies (Score:1)
The world is ready for Trump and Bezos to be cellies at Club Fed.