Amazon's Project Iliad: The juiciest highlights from the FTC's Prime lawsuit

• The FTC sued Amazon on Wednesday over its Prime membership signup and cancellation process.
• The FTC said Amazon intentionally failed to disclose material related to the case and delayed the investigation.

The FTC sued Amazon on Wednesday, alleging the company duped consumers who were trying to cancel their Prime subscriptions.

Insider broke the story that triggered this legal action. Amazon said the FTC's claims are "false on the facts and the law." We took a close look at the complaint. Here are the highlights:

• Amazon called the difficult cancellation process the "Iliad" in reference to Homer's epic poem, as Insider previously reported.
• "Amazon designed the Iliad cancellation process ("Iliad Flow") to be labyrinthine, and 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 adversely affected Amazon's bottom line."
• The suit describes the Iliad process as "Prime's Four-Page, Six-Click, Fifteen-Option Iliad Cancellation Process" because it takes that many steps to cancel.
• "To cancel via the Iliad Flow, a consumer had to first locate it, which Amazon made difficult," the FTC said.

• Amazon has two ways to upsell Amazon Prime to customers: interstitials and non-interstitials. Interstitials were a whole new webpage promoting Prime that the customer didn't seek in the first place. Non-interstitials were messages embedded within the pages the customer was looking at, according to the suit.

• "The current mobile upsells contain many of the same problematic elements as the [redacted]—including misleading language and manipulative designs—which lead consumers to enroll in Prime without their consent," the FTC said.

• Amazon tricked customers who were looking to buy Prime Video to instead purchase Prime, the suit alleges. The regular Prime offering is more expensive and includes Prime Video within its offerings.

• Amazon capitalized on some consumers' inability to appreciate the difference between "Prime" and "Prime Video" and had them sign up for the more expensive option unknowingly, according to the suit.
• "After receiving June 30, 2022 CID, Amazon changed the Prime Video enrollment flow for Prime."
• To cancel Prime, consumers had to contact customer support; locate the "manage membership" page and press a button labeled "End Membership"; or search "How to cancel membership" in the Amazon search bar, then move through multiple steps.
• It's equally difficult to cancel Prime on a mobile device, involving an 8-page, 8-click minimum process, the FTC investigation found.
• Amazon knows that Nonconsensual Enrollment is both "widespread" and "well-understood" at the company, the lawsuit stated.
• Amazon uses, or has used, 6 different "manipulative designs" in the Prime signup and cancellation process. They include: Forcing users to perform a certain act; making certain information ambiguous; intentionally complicating a process through unnecessary steps; misdirecting users with less prominent links; sneaking or disguising relevant information; and "confirm shaming" by using emotive wording around the disfavored option to guilt users into selecting a favored option.
• Other subscription services, like Audible, Kindle Unlimited, and Amazon Music Unlimited, use similarly manipulative designs.
• The FTC first contacted Amazon about the investigation on March 16, 2021. By March 14, 2022, a year later, Amazon had shared "only a small amount of material."
• On March 14, 2022, Insider published a story based on leaked information that "ascertained that Amazon had failed to disclose much of the now-leaked documents and information to the Commission."
• On June 30, 2022, the FTC filed a request to demand more information from Amazon. Amazon did not comply, the FTC said.
• On August 5, 2022, Amazon filed a petition with the FTC, requesting to quash the FTC's demands. The Commission denied that petition on September 21, 2022.
• Amazon produced very few documents during the 2-year investigation. The FTC said small businesses routinely produce more material to Commission investigators.
• The FTC alleges it has "reason to believe [Amazon] is violating, and is about to violate, laws enforced by the Commission" because it has repeatedly delayed the investigation process for years.
• The FTC alleges Amazon only changed its cancellation process "in response to pressure from the Commission, and without such pressure — including this lawsuit — Amazon would likely restore" its old design.
• The FTC said, "the continued presence of these problematic elements illustrates that, although the form of the cancellation flow recently changed, Amazon's mindset has not."
• Amazon has charged consumers without their express informed consent "in numerous instances." And Amazon's actions can cause "substantial injury to consumers" that cannot reasonably be avoided, according to the suit.
• Amazon violated the Restore Online Shoppers' Confidence Act (ROSCA), which prohibits charging consumers for goods or services through a "negative option feature," the FTC alleged.
• Amazon failed to "clearly and conspicuously disclose all material terms of the transaction" before charging consumers for Prime.
• Amazon failed to "obtain the consumer's express informed consent" before charging consumers for Prime.
• Amazon failed to "provide simple mechanisms for a consumer to stop recurring charges" for the Prime membership.

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