Policy

The FTC is going after dark patterns. That’s bad news for Amazon Prime.

Companies including Amazon present customers with confusing screens, disclose fees in small print and require that people traverse labyrinths before they can cancel.

A screen surrounded by eyes that reads: "Continue to subscribe?"

“Is nagging protected by the First Amendment as a sales strategy?”

Illustration: Christopher T. Fong/ Protocol

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Companies’ favorite tactics for locking in subscribers are under scrutiny by government enforcers, and it could spell trouble for tech giants like Amazon that have huge numbers of customers paying up every month.

Dark patterns are design decisions or settings that nudge — or, sometimes, shove — consumers toward actions that companies want, even if customers don’t. These can include pre-checked permission boxes, autoplay, hidden fees, unexpected shifts in pricing and time-consuming processes for canceling recurring payments. Subscriptions are a fertile ground for dark patterns, and as tech goes all in on recurring payments, the nudges are popping up everywhere, from video games, streaming and travel sites to ecommerce and even financial products.

Enforcers, especially at the FTC, are concerned about dark patterns generally — and specifically, that these tricks undermine consumers’ ability to make their own choices and may run afoul of legal prohibitions on unfair or deceptive practices.

"Dark patterns are part of a larger system of deceptive and manipulative practices that we see growing all too rapidly in the commercial digital surveillance economy," FTC Commissioner Rebecca Kelly Slaughter said last year at an agency workshop.

Washington, D.C., Attorney General Karl Racine has also gone after Grubhub and Google, in part over allegations of using dark patterns, respectively to charge extra fees or track users’ locations.

Dark patterns involved in subscriptions specifically allow companies to extract hard-earned cash from users for months or years, tricking all but the most savvy and persistent customers into signing up and sending them into labyrinths if they want to cancel. All that money also means it’s relatively easy for law enforcement to measure exactly how much customers are getting cleaned out — in a way that’s not always true of other cases involving dark patterns.

“With a subscription, there’s a cognizable harm that you can put a number on,” said Emily Peterson-Cassin, a digital rights advocate at the consumer group Public Citizen.

In 2020, for instance, the company behind an ed tech tool agreed to pay $10 million to settle FTC allegations that it made cancellation hard and didn’t secure consent for auto-renewing subscriptions. Then, last fall, the agency said it would take aim at “illegal dark patterns that trick or trap consumers into subscription services” and urged companies that wanted to stay on the right side of the law to disclose purchase terms prominently and clearly, to get informed consent and to make it easy to cancel.

“The agency is ramping up its enforcement in response to a rising number of complaints about the financial harms caused by deceptive sign up tactics, including unauthorized charges or ongoing billing that is impossible [to] cancel,” the FTC said.

Prime candidate

The big question, then, is whether the FTC will take on a fight with tech firms and major digital subscription services in the U.S. The agency certainly has options beyond “guidance” — including industry studies, rules or even injunctions and fines — though the companies that touch the most people’s lives also tend to make enforcement the most painful and costly.

Consumer advocates — and some international enforcers — certainly seem to think that Amazon is the “Prime” target for action. Last year, seven influential consumer and privacy groups led by Public Citizen urged the FTC to take action against Prime, which has more than 200 million subscribers and recently hiked its price by $20 annually. A Norwegian consumer group also launched its own complaint on the same day. The U.S. advocates called Prime “a ‘roach motel,’ where getting in is almost effortless, but escape is an ordeal.”

One of the U.S. groups, the Electronic Privacy Information Center, also filed a complaint the following month with the Washington, D.C. attorney general’s office, detailing at least six steps that consumers have to take to cancel Prime, many of which include pleading or warning language and multiple options that would divert users from canceling.

Amazon did in fact deliberately make the cancellation process more complicated in 2017, according to a recent report in Insider. The company has also resisted changes despite complaints from customers who said they were tricked into signups in the first place.

The difficulty of canceling Prime is a stark contrast to Amazon’s work to make online buying so frictionless, said Jen King, a fellow at the Stanford Institute for Human-Centered Artificial Intelligence who consulted with the FTC in a prior case against Amazon.

“That asymmetry is becoming, I think, a really key point with policymakers,” she said. “I can literally buy something with a click, but I want to cancel and you can’t somehow accommodate that with two clicks?”

Amazon said its subscription processes were “clear and simple,” but the 2014 case on which King worked shows it has a history of getting into trouble over its designs, even if they weren’t called “dark patterns.” In that instance, the FTC launched a successful complaint against the company over kids’ in-app purchases on Kindle Fire and other devices. The agency alleged Amazon presented purchases using real money on similar screens to the ones where kids could acquire goods using digital “acorns” or “coins.”

Although the Insider report said the FTC has looked into Amazon’s Prime subscriptions issue, it’s not clear if the agency can, or wants to, go after the company again for similar practices. The FTC has been open about the limits of its strained resources and is already deep into a long-running antitrust investigation into the company.

Companies like Google have simply asserted they don’t often rely on the practices for persuasion without explaining why their products are rife with nudges if that’s the case. There are also lingering scholarly questions about whether design decisions — and longstanding pressure tactics that predate tech — would merit free speech protections.

“Is nagging protected by the First Amendment as a sales strategy?” Lior Strahilevitz, a professor at the University of Chicago’s law school, told the FTC’s dark patterns workshop. “We just don't have a lot of precedent there.”

In the meantime, Amazon doesn’t seem to be the only target, nor the FTC the only part of government interested in the issue: Earlier this month, the Consumer Financial Protection Bureau sued credit reporting bureau TransUnion, alleging the company “deployed digital dark patterns to dupe Americans into subscription plans” after a settlement in which it agreed it would make plans easy to cancel.

“The enforcers are getting a little bit more confident about what to tackle,” King said.

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