FTC Adds Senior Executives Who Played Key Roles in Prime Enrollment Scheme to Case Against Amazon

The Federal Trade Commission has named three senior Amazon executives in an amended complaint in its case against the company for its years-long effort to enroll consumers into its Prime program without their consent while knowingly making it difficult for consumers to cancel their Prime subscriptions.

Named in the amended complaint are Neil Lindsay, who served as senior vice president overseeing Prime and now serves on the company’s overall leadership team; Russell Grandinetti, who also serves as a senior vice president overseeing Prime; and Jamil Ghani, a company vice president who oversees the Prime subscription program.

In addition to naming these individuals, the amended complaint includes significant new details of Amazon’s alleged misconduct that were redacted in the original complaint, including the contents of internal company emails and messages that show the extent to which the company and its management team were aware of the misconduct.

The FTC’s amended complaint charges that Lindsay, Grandinetti, and Ghani were fully aware of the issues surrounding consumers being subscribed to Prime without their consent and then facing significant hurdles when trying to cancel. The executives were informed by other Amazon employees in emails, meetings, and presentations about these issues and encouraged to make changes to stop Amazon from tricking its customers, but the executives chose not to act, according to the complaint.

The complaint alleges that the company and its executives instead slowed, avoided, and even reversed user experience changes that they knew would reduce nonconsensual enrollment because those changes would also negatively affect Amazon’s bottom line. As one draft internal memo stated, Amazon decided “clarifying” the enrollment process was not the “right approach” because it would cause a “shock” to business performance.

Amazon also created an allegedly labyrinthine cancellation process for Prime that the company called “Iliad,” the name of Homer’s epic about the long, arduous Trojan War. While Amazon—under pressure from the FTC—made some changes to its processes just before the agency’s initial complaint was filed, the Iliad cancellation flow was in place for years. The complaint alleges that Amazon and its leadership—including Lindsay, Grandinetti, and Ghani—slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes would hurt Amazon’s profits.

Newly Unredacted Information

The unredacted complaint’s allegations also revealed:

• Excerpts from an Amazon document that uses the term “misdirection” to refer to the company’s practice of forcing consumers to find a small blue text link to make a purchase without joining Prime, while using a far more prominent button saying “Get FREE Two-Day Shipping” that actually enrolls consumers in Prime.
• Information about tactics used by the company to force consumers into the complex Iliad cancellation flow, such as a company policy that required Amazon customer service employees to direct consumers who called to cancel Prime to the Iliad flow online, even though customer service agents had the ability to process the cancellation.  
• Findings highlighted in a company newsletter that said, “The issue of accidental Prime-sign ups is well documented” and acknowledging that Prime customers “sign[] up accidentally and/or [don’t] see auto-renewal terms.”
• Statements from Amazon employees acknowledging the company’s use of user flows “designed to mislead or trick users to make them do something they don’t want to do, like signing up for a recurring bill.”  Amazon employees began raising this issue for company leaders, who refused to take action, as early as 2016.
• Details about Amazon’s attempts to delay and hinder the FTC’s investigation of these issues, including attempting to apply legal privilege to documents that were not privileged and concealing the existence of other relevant, damaging documents.

The Commission vote authorizing the staff to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the Western District of Washington.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The staff attorneys on this matter are Evan Mendelson, Olivia Jerjian, and Max Nardini of the FTC’s Bureau of Consumer Protection.