How Amazon became the target of a crackdown on anti-consumer, anti-competitive behaviour

Prime Day, the biggest day of the year for e-commerce giant Amazon and members of its loyalty program, Prime, kicked off this week, with deep discounts on everything from clothing to toys, gadgets and small appliances.

While consumers are likely to be on the hunt for deals, the most beneficial one for the company itself may be to settle a brewing dispute with regulators about some of its alleged business practices.

Last month, the U.S. Federal Trade Commission sued the company for allegedly duping customers into signing up for Prime — which brings perks such as lower prices, faster deliveries and a streaming video and music service.

The regulator said in a statement the company uses "manipulative, coercive, or deceptive user-interface designs known as dark patterns to trick consumers" into signing up for Prime subscriptions, which can cost up to $15 per month.

The company makes it easy to sign up for the service with little more than a single click, but cancelling is another matter altogether. Up until earlier this year, the FTC says the main way to stop paying for Prime online was to go through a Byzantine process that involves navigating through four different pages, clicking six different times to select through 15 different options to find the one you want: cancel.

While the company changed the process shortly before the FTC launched an investigation, Amazon's internal name for that process was "Iliad flow" — which, the FTC said, makes for an apt "allusion to Homer's epic poem set over twenty-four books and nearly 16,000 lines about the decade-long Trojan War." 

The "primary purpose" of the cancellation process was "not to enable subscribers to cancel, but to stop them," the FTC said. "Amazon leadership slowed or rejected changes that would've made it easier for users to cancel Prime because those changes adversely affected Amazon's bottom line."

Ignacio Cofone, the Canada Research Chair in AI law and data governance at McGill University, says those "dark patterns" the FTC refers to are essentially tricks to get people to sign up for products or services that they might not necessarily want or understand.

They "deceive users to get users to act in ways that are beneficial to the company, not users," he told CBC News.

"The key word there is 'deceive' ... for example, by having a 'yes' option highlighted in blue, and a 'no' option that is not highlighted — or presenting things in the way that highlight benefits and hide costs."

While Amazon is the latest and biggest target, Cofone says it is by no means the only company accused of using them.

"This is not unique to Amazon," he said. "If they are engaging with dark patterns, they're doing something that is prevalent in the permission economy," he said. 

Dark patterns are "not the disease — they're a symptom of the real disease, which is that we mechanically click 'I agree' to everything without understanding."

For its part, Amazon says it plans on fighting the lawsuit every step of the way, calling the FTC's allegations "false on the facts and the law."