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Why Amazon is a Prime target for the FTC

Protocol Policy

Hello, and welcome to Protocol Policy! This week is a little special for us: The Protocol staff is all together, in person, for the first time in … ever, actually, learning who is taller or shorter than you expect them to be when they’re not confined to a Zoom square on your screen. So please enjoy today’s special edition, featuring a look at dark patterns from our Subscriptions Week coverage and a run-down of all the goings on with Twitter’s surprise pending change in ownership.

Prime suspect

Amazon Prime may be the ultimate digital subscription: a bundle of conveniences with millions of loyal fans who know it’d be too annoying to pause when they’re not using it. That’s why the FTC may care more about it than you’d think.

The FTC is interested in all those nudges to sign up, plus that “just when I thought I was out, they pull me back in" cancelation process.

  • The FTC has made clear that dark patterns — those prodding design features, pre-checked boxes, railroading options and confusing directions that derail you from leaving something — may be illegal.
  • Basically, according to the FTC, dark patterns often deceive or manipulate consumers into taking actions — and spending a lot of money — that they don’t want to.

That scrutiny may be bad news for egregious subscription setups overall, but consumer groups would really like to focus enforcers’ ire on Prime in particular.

  • According to one complaint, for instance, it takes six steps to cancel Prime.
  • This from a company that could get me a Hobbit-themed shower curtain by tomorrow with a single click. (I’m considering it!)
  • This asymmetry is reportedly deliberate, and persists despite FTC concerns. Amazon, for its part, says its subscription processes are “clear and simple.”

So will the FTC actually pick this up?

  • Well, going after Prime makes a lot of sense if you think the agency’s very top priority should be taking on the biggest companies that are mining monthly fees from the most users, which is ostensibly what Lina Khan and Co. do believe.
  • But the truth is, the FTC is strapped for cash and going up against giants day after day — including Amazon itself, in the agency’s long-running antitrust probe. That means making tough choices about how to use resources and which cases to chase first.
  • Plus, Amazon didn’t invent the hard sell with a smile, and it’s not exactly clear how much legal protection should be afforded to nagging as a commercial strategy.

All of that means that the future of your Prime-discounted deliveries isn’t exactly tenuous. But the subscription could get some heat — and there’s little doubt that Amazon overall will continue to be enforcers’ top target.

— Ben Brody (email | twitter)

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In Twitter

Some poison pill that turned out to be. Whatever Twitter’s board thought it was doing to prevent Elon Musk from becoming the company’s sole shareholder didn’t work out — but Musk’s negotiations with bankers to get financing for his audacious $43 billion bid did. With the money in hand, his talks with the company evidently went much more smoothly. In the end, he got what he wanted: Twitter and Musk said Monday they agreed to a deal that will see Musk take the company private for $54.20 per share.

The transaction could take up to six months to close, according to the company’s filing with the SEC. Users, however, are already voting their confidence — or lack thereof — in Musk’s incipient ownership. Several major right-wing figures have seen their follower accounts increase while non-political and left-leaning accounts have lost tens or even hundreds of thousands of followers all since Monday. Twitter told NBC News the “fluctuations” in usership are “organic,” but didn’t give more detail than that.

Here at Protocol, we’ve been trying to answer the many, many questions we’re all left with — and the concerns many might have — about Musk’s takeover plan. For example:

  • What the heck is actually going on, and how did we get here? We’ve got a timeline of all the big plays so far.
  • Musk says he doesn’t want any content “censored” beyond the letter of the law. And while that might mean one thing in the U.S., it means a hundred different things around the world, in all the countries where Twitter operates. What does he plan to do about that?
  • He also says he wants Twitter to make money from subscriptions and other offerings in addition to just advertising. Good luck with that: So far, Twitter’s subscription offering has very low uptake — and some proposed versions would bring in less revenue per user than an ad-plastered Twitter currently makes.
  • But all of this, of course, presumes Musk is actually taking this plan seriously — and even at this late juncture, who can really be sure how serious the internet’s troll-in-chief is about anything?

A MESSAGE FROM INTEL

At Intel, we have an over 50-year history of manufacturing innovation, and we believe in the power of technology to create a more responsible, inclusive, and sustainable world for all. Discover how smart infrastructure solutions from Intel can help transform the future.

Learn more

Thanks for reading! We’ll be back with our regularly scheduled programming on Friday.

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