LEILA FADEL, HOST:
One of the biggest U.S. lawsuits against Amazon is going to trial today. The federal government accuses the tech giant of tricking people into paying for prime memberships that were purposefully hard to cancel. Amazon is fighting these allegations in a courtroom in its hometown of Seattle. And we should note that Amazon is among NPR's financial supporters, but we cover it like any other company. NPR's Alina Selyukh has followed this case, and she joins us now. Good morning, Alina.
ALINA SELYUKH, BYLINE: Hello, hello.
FADEL: All right, so set the stakes for us. What's happening?
SELYUKH: Yeah. So this is one of the two major federal lawsuits brought against Amazon in recent years by the Federal Trade Commission, which regulates competition. One lawsuit made this massive accusation that Amazon basically functions as a monopoly. That case is not what we're talking about. That trial is not until 2027.
FADEL: OK.
SELYUKH: This case is kind of like the appetizer course before the main entree. It's a case focused on Prime.
FADEL: Which is Amazon's membership program.
SELYUKH: Yes. And the case goes back almost a decade. But right now, Prime costs $139 a year or $15 a month. So it's very lucrative. It's earning Amazon tens of billions of dollars.
FADEL: So what are the allegations in this case?
SELYUKH: The FTC says Amazon broke competition and consumer protection laws by how it got people to pay for Prime subscriptions. There are some juicy terms involved. The FTC says Amazon used dark patterns, which means manipulative web designs to get people enrolled into Prime. Think like a huge yellow button that says, get free same-day delivery, and boom, you're signed up for Prime versus a smaller, just, like, hyperlink in blue that says, no thanks, I don't want free delivery, and that avoids signing up for Prime.
FADEL: OK.
SELYUKH: And then on the other end, the multistep process to cancel a Prime membership. Internally, Amazon employees had a code name for it, calling it the Iliad flow.
FADEL: Iliad, like the epic ancient Greek poem by Homer?
SELYUKH: The long and arduous poem about the long and arduous Trojan War. So essentially, the FTC says Amazon, quote, "tricked" tens of millions of people into the recurring Prime membership and then made people jump through too many hoops to cancel subscriptions.
FADEL: OK, so what is Amazon saying to this accusation that they're basically illegally tricking millions of people into signing up?
SELYUKH: Amazon lawyers argue the company has done nothing illegal. They say Prime designs and disclosures follow widely accepted industry standards and, in fact, clearer than other companies. In its trial brief, the company says that, quote, "occasional customer frustrations and mistakes are inevitable," especially for a program as popular as Amazon Prime, and "evidence that a small percentage of customers misunderstood Prime enrollment or cancellation does not prove that Amazon violated the law."
FADEL: Do you have any sense of how this case will go?
SELYUKH: You know, there's a wild card factor, which is that much of the case is actually going in front of a jury. That's somewhat rare for a dense antitrust lawsuit, and I'm not sure if having a local jury in Seattle will give Amazon a hometown advantage or the opposite. And as far as the judge on the case, so far, he has made several procedural rulings in the FTC's favor. He's also formally admonished Amazon lawyers for some of their legal tactics, all of which to say this trial could have some drama in store, and it's expected to go on until at least late October.
FADEL: NPR's Alina Selyukh. Thank you for your reporting.
SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.
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