A Seattle jury is weighing whether Amazon illegally “tricked” millions into its lucrative Prime program. Launched in 2005 at $79 per year (now $139), Prime has grown to over 200 million members worldwide, generating tens of billions in annual revenue.
Critics say this trial could redefine how tech firms design subscription sign-ups. A loss could force Amazon to overhaul its checkout flow; a win might embolden other firms.
The stakes are huge: the outcome will influence not just Amazon’s bottom line, but potentially subscription practices across Silicon Valley.
Regulatory Power
The case spotlights FTC Chair Lina Khan’s aggressive consumer-protection agenda. Khan, a Biden appointee, has targeted “dark patterns” – deceptive UI tricks – across the tech industry. Her FTC argues Amazon’s Prime enrollment violated long-standing laws (like ROSCA) by obscuring terms until after billing info was collected.
Khan’s agency even tweeted that sign-up pages “should not have any ambiguity” about costs and renewal.
This is a rare FTC jury trial testing those claims. A ruling against Amazon could embolden regulators nationwide to sue other subscription services; a win would signal limits on the FTC’s reach.
Prime Origins
Prime began in 2005 as a fast-shipping membership with a $79 annual fee. Over time, it morphed into an all-in-one bundle (streaming video, grocery delivery, exclusive deals, etc.), with a current price of $139/year.
Today, Prime drives deep customer loyalty and outsized spending: Alina Selyukh of NPR notes it “earns Amazon tens of billions of dollars” each year.
That cash flow makes Prime a pillar of Amazon’s strategy. It also raises the stakes: even small tweaks to signup or cancellation flows could sway millions of dollars in revenue, which partly explains why Amazon treated these issues so carefully.
Consumer Complaints
Long before the trial, Amazon employees flagged Prime enrollment problems. Internal emails admitted that confusing signup wording caused “unintentional sign-ups [that] erode customer trust.” One report called the issue an “unspoken cancer” within Amazon – meaning any fix would shock the business by shrinking the member count.
On the consumer side, thousands reported accidentally buying Prime or finding cancellation impossible.
The FTC first opened an inquiry in 2021; by 2023, it formally charged Amazon with using “manipulative” design tactics to bait unwary shoppers into renewing Prime.
Millions Tricked
The FTC claims Amazon enrolled over 35 million people into Prime without clear consent. Prosecutors say Amazon’s main metric became sheer subscriber count – “Nothing about Prime matters more than the number of members, whether those members wanted to be members or not,” FTC attorney Jonathan Cohen told the jury.
In court, Amazon counters that Prime membership is an opt-in benefit, calling the FTC’s case “shady.” Defense attorney Moez Kaba insisted on Day 1: “This is not a shadowy, gimmicky program. Nobody gets automatically enrolled for Prime.”
The jury will have to sort this standoff: a deliberate bait-and-switch or standard industry practice?
Seattle Impact
Having the trial in Seattle – a stone’s throw from Amazon HQ – adds drama. U.S. District Judge John Chun has already given the FTC a partial win by ruling Amazon likely violated federal law (ROSCA) before trial.
Chun found Amazon collected payment data before clearly stating Prime’s terms. FTC chief Chris Mufarrige called that win “a strong affirmation that Amazon defrauded American consumers by failing to disclose all terms of Prime before collecting their payment information”.
Those rulings will let jurors focus on the facts rather than some defenses. Whatever the outcome, Seattle is watching closely.
Customer Stories
Real users have voiced frustration. One Amazon insider admitted bluntly, “We have been deliberately confusing users, a tactic he called ‘very un-Amazonian.
Customers report feeling trapped by fine print and counterintuitive flows. For example, one common complaint was that a big yellow “Get FREE Shipping” button signed them up for Prime, while a small “No, thanks” link was easy to miss.
Those trapped consumers – farmers ordering supplies, retirees trying to cancel – are the human face of the case. Their voices, once siloed in emails, are now central: “Millions of consumers accidentally enrolled in Prime,” the FTC brief notes, because Amazon “refused to fix” the problem.
Industry Competition
Prime isn’t operating in a vacuum. Walmart charges $98/year for Walmart+ and Costco $60–$120 (depending on location) for their membership. Morgan Stanley data shows huge overlap: about 86% of Walmart+ members also pay for Prime.
In fact, Morgan Stanley notes Amazon still has roughly 94 million U.S. Prime households versus ~23.8 million Walmart+ members (adjusted to ~15.5 million).
Meanwhile, Costco boasts ~55 million members in the U.S. and Canada. As membership services multiply, all players fiercely lock in consumers. Regulators worry that blurring enrollment tricks could chill competition; Amazon argues this is just aggressive retailing.
Dark Patterns Trend
Amazon’s trial is just one front in a broader “dark patterns” crackdown. In recent years, the FTC and other regulators have penalized multiple companies for similar tricks. For example, Publishers Clearing House agreed to pay $18.5 million in 2023 for misleading sweepstakes entry forms, and Epic Games paid $245 million for confusing in-game purchase buttons.
Even Credit Karma settled for $3 million after using hidden disclosures about “pre-approvals”.
These actions show the FTC’s resolve: it considers deceptive sign-up or cancellation flows a serious consumer harm across retail, gaming, finance and beyond.
Iliad Revelation
One of the case’s juicier anecdotes is Amazon’s internal nickname for its cancellation system: “Iliad.” Inspired by Homer’s epic, the Iliad flow forces a would-be canceller through four pages, six clicks, and fifteen options before Prime ends.
Amazon says each step is necessary to confirm the customer really wants to quit. Detractors call it a “labyrinthine” maze designed to exhaust users.
When the FTC documented this during the trial, jurors could see screenshots of small links buried in menus. The effect: tens of thousands drop cancellation mid-way. One FTC attorney quipped that even Homer’s Odysseus would have bailed midway.
Executive Frustration
Behind the scenes, Amazon’s leaders were well aware of the complaints. As the FTC revealed, senior executives Neil Lindsay, Jamil Ghani, and Russell Grandinetti were repeatedly told of accidental Prime sign-ups and cancellation woes.
Yet emails show Amazon managers “slowed, avoided, and even reversed” fixes when they realized clarity would dent revenue.
One draft memo explicitly said changing the confusing labels was not the “right approach” since it would cause a “shock” to business performance. In other words, as long as obscuring the truth meant more subscribers, the user experience took a back seat. That makes this not just a customer issue, but a leadership one.
Leadership Changes
Judge Chun’s pre-trial decisions have raised the stakes for executives personally. Unlike most consumer suits, this case could hold individuals liable. Last month, Chun ruled Lindsay and Ghani would be automatically on the hook if Amazon is found guilty.
Two of Amazon’s top Prime architects now face potential personal fines or injunctions – a first for U.S. consumer protection law at this scale. The FTC argues they rubber-stamped plans knowing the deception.
Amazon’s defense counters that neither the company nor its leaders did “anything wrong”. The jury’s verdict could therefore determine the fate of Silicon Valley’s executive accountability.
Defense Strategy
Amazon vehemently disputes the FTC’s narrative. In court filings, the company stresses that Prime’s terms were communicated and that cancellations were simpler than critics claim. Lawyers argue that only a “small percentage” of customers ever complained or “misunderstood” the enrollment flow.
They note industry peers use similar signup buttons and multi-step opt-outs. Amazon spokesman Moez Kaba told jurors, “This is not a shadowy, gimmicky program. Nobody gets automatically enrolled for Prime.”
More pointedly, Amazon’s public statements to CBS News repeated the line: “neither Amazon nor the individual defendants did anything wrong”. Essentially, Amazon frames the FTC as overreaching against standard business practices.
Expert Skepticism
Legal analysts have been closely watching Judge Chun’s rulings. After the September 18 summary judgment order, one court filing admitted: “No reasonable jury could find in favor of Amazon” on the billing-info-before-terms issue.
That blunt assessment (from an internal document in the AInvest summary) suggests even some supporters of Amazon see weakness in its case. Commentators note that Chun has already barred several of Amazon’s defenses.
With such tone-setting, many expect the FTC’s arguments to carry more weight at trial. Still, jurors will separately consider each claim – and Amazon maintains it will prevail based on evidence of customer consent and choice.
Financial Stakes
If the jury rules for the FTC, Amazon could face billions of dollars in penalties. Under the 2010 Restore Online Shoppers’ Confidence Act (ROSCA), each illegal charge can be fined up to about $53,000. Multiply that by millions of affected consumers, and the exposure quickly reaches the high hundreds of millions or even billions.
Beyond fines, Amazon might be forced to change its signup and cancellation flows, potentially slowing new member growth.
Investors will watch closely: analysts warn a loss could dent Amazon’s stock and raise questions about the long-term loyalty model. Conversely, a win for Amazon might save its bottom line but leave customer trust bruised.
Antitrust Connection
The Prime trial is only Part One in the FTC’s campaign against Amazon. By contrast, the second FTC suit – accusing Amazon of illegal monopolization – is set for early 2027 in the same Seattle courthouse.
Regulator Lina Khan has framed these as linked battles: first, the FTC calls out subscription “dark patterns,” then it will argue Amazon uses its e-commerce heft to crush competition. Winning on Prime could bolster the agency’s narrative of systemic abuse.
A split outcome (FTC wins on Prime but fails on monopoly, or vice versa) would complicate both cases. Either way, these back-to-back trials reflect a broader political push to rein in Big Tech’s market power.
Global Implications
Officials worldwide are watching Amazon’s case for clues about handling their own dark-patterns laws. The European Union’s Digital Services Act (DSA) and California’s Automatic Renewal Law already require clear disclosure of subscription terms and one-click cancelation.
If Amazon is found liable under U.S. law, regulators abroad may feel pressure to enforce similar rules more strictly. Countries in Asia and Latin America have also begun examining deceptive interfaces.
A verdict for the FTC could encourage a wave of cross-border cooperation – for example, sharing evidence of Amazon’s practices. A verdict for Amazon might embolden global platforms to resist new rules, at least until those rules are tightened.
ROSCA Legacy
Central to the FTC’s case is a 2010 consumer law (ROSCA) designed for the data-driven age. Originally aimed at schemes that charged credit cards without clear permission, ROSCA requires any subscription service to disclose all terms before taking payment information. Judge Chun found that Amazon’s checkout flow violated this rule.
ROSCA makes it illegal to charge someone through “negative option” unless they gave consent with full knowledge. Until now, ROSCA was better known for catching simple email scams – this trial will test how well it handles subtle digital traps.
Lawyers say the outcome will clarify ROSCA’s reach over everything from app subscriptions to online groceries.
Generational Shift
Consumer attitudes are also evolving. Younger shoppers, who make up roughly 81% of Prime members, are especially sensitive to hidden fees and tricks. Surveys show Gen Z and Millennials prize brand transparency. Already, some customers view non-consensual enrollment as a breach of trust.
If the trial reveals that Amazon systematically deceived users, the company’s brand could take lasting damage among its core demographic.
Conversely, Amazon’s deep branding and Prime perks might soften the blow for many fans. But one thing is clear: a high-profile hit to Amazon’s reputation could lend momentum to a cultural push for “subscription hygiene” in all industries.
Future Framework
The jury’s verdict will help redraw the line between savvy marketing and illegal coercion. A win for the FTC would likely force industry-wide changes – for example, clearer on-screen notices, simpler opt-out flows, and possibly new laws to define “informed consent” in digital commerce.
Retailers, streaming services, and app developers would all recalibrate their signup pages. Conversely, if Amazon wins, other tech companies may double down on aggressive retention tactics, arguing that complex flows are just good business.
This case is a landmark moment: it will set a precedent for how far design can go in chasing subscribers, shaping consumer protection in the digital era.