Lawsuit spotlights Amazon’s “secret project” designed to thwart Prime membership cancellations

Seattle-based consumer-rights law firm Hagens Berman today filed a class-action lawsuit against Amazon Inc., accusing it of employing illegal, underhanded tactics to trick Amazon Prime members into maintaining their subscriptions, and did so intentionally through a secret project designed to thwart Prime cancellations.

The lawsuit, filed in the U.S. District Court for the Western District of Washington says the world’s largest retailer violated the Washington Consumer Protection Act with its intentionally confusing and lengthy process required to cancel an Amazon Prime membership – so-called dark patterns. These tactics, according to the lawsuit, were strategized through Project Iliad.

If you are a current Amazon Prime member or a former member, and you attempted to cancel your Prime subscription within the last four years only to be charged another Prime fee, you may be entitled to compensation under consumer-rights laws.

Difficult by Design

The class action reveals that through Project Iliad, Amazon added multiple layers of questions and new offers before a Prime member could cancel their subscription, making the process layered and confusing. Amazon’s dark patterns – methods of deception derived from behavioral psychology that exploit cognitive biases to influence and manipulate consumer choices – include a barrage of language, design and redundancies.

“Cancelling an Amazon Prime subscription is effectively an endurance test for consumers, forcing them to jump through multiple hoops, and an intentionally confusing obstacle course of bad user experience design and misleading word choice,” said Steve Berman, managing partner at Hagens Berman representing the proposed class of Amazon customers. “When the world’s largest retailer offers its core customers a ‘bad experience’ one must be suspicious that there is an ulterior motive, and in Amazon’s case, it’s profit.”

“If you’re unlucky enough to be one of Amazon’s biggest supporters, this is how you’re rewarded,” Berman added.

After launching Project Iliad, Amazon managed to reduce the number of Prime cancellations by 14% at one point in 2017 as fewer members managed to reach the final cancellation page, according to the lawsuit.

Specific examples of Amazon’s dark patterns are displayed in the filing, and include confusing labels to find where to end one’s membership, redundant layers of choices, vague language, warnings against cancellation, deceptive design of buttons to navigate the cancellation process, double negatives to confuse the implied meaning as well as changes to the terminology used to cancel. What one screen calls “membership” may be called “benefits” in the next step.

“The process to cancel a Prime membership stands in stark contrast to the simple and intuitive sign-up process for the same service,” Berman said. “Clearly Amazon knows how to benefit the customer’s experience when it wants to do so.”

Prime Numbers

“Because Prime members are so valuable to Amazon, it is loath to let them go. And it shows,” the lawsuit argues.

The consumer case illustrates the math behind Amazon’s Prime customer basis, showing how advantageous it is for Amazon to keep tight hold of its 163 million U.S. subscribers. Globally, Amazon collects $25 billion a year in Prime subscription fees with U.S. subscribers accounting for about three quarters of its subscription revenue, according to the filing.

“Amazon values its Prime members not only for the subscription fees it collects from them, currently $139 a year, but also because Prime members spend more than twice as much as other Amazon customers, averaging about $1,400 per year,” the suit states. “Having a large number of Prime members also increases Amazon’s share of online retail commerce. On average Prime members in the U.S. do 53% of their shopping online and make most of their online purchases on Amazon.”

The Electronic Privacy Information Center (EPIC), a pro-consumer group describes Amazon’s convoluted cancellation as a misdirection designed to foster uncertainty about the choice to cancel Amazon Prime, the lawsuit says. The FTC is reportedly currently investigating Amazon’s dark patterns and as part of its investigation it has subpoenaed 20 current and former Amazon employees and executives to testify, including Amazon founder Jeff Bezos and current Amazon CEO Andy Jassy.

The lawsuit seeks to enjoin Amazon’s practices and recoup losses for those who attempted to cancel their Prime membership, only to incur an additional fee.

Find out more about the class-action lawsuit against Amazon on behalf of its Prime members.

About Hagens Berman

Hagens Berman is a global plaintiffs’ rights complex litigation law firm with a tenacious drive for achieving real results for those harmed by corporate negligence and fraud. Since its founding in 1993, the firm’s determination has earned it numerous national accolades, awards and titles of “Most Feared Plaintiff’s Firm,” MVPs and Trailblazers of class-action law. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

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