FTC names senior Amazon executives in suit over Prime memberships

The Federal Trade Commission on Wednesday named three senior Amazon executives in an amended complaint against the online retail giant over its efforts to get customers to sign up for its Prime program.

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The agency filed suit against Amazon in June, accusing the company of using misleading tactics to get users to sign up for Prime and then putting them through a convoluted process to cancel their memberships.

Amazon has denied any wrongdoing, with a spokesperson calling the FTC’s complaint “false on the facts and the law” in a statement released in June.

In the amended complaint filed Wednesday, the FTC said employees pushed executives — including Neil Lindsay, who previously served as a senior vice president overseeing Prime, Russell Grandinetti, Amazon’s senior vice president of international stores, and Jamil Ghani, vice president of Amazon Prime — to do something about the sign-up process so that consumers would not be tricked. However, the FTC said they “slowed, avoided, and even undid user experience changes that they knew would reduce Nonconsensual Enrollment because those changes would also negatively affect Amazon’s bottom line.”

The FTC said employees began raising the issue with company leaders as early as 2016.

“As one internal memorandum stated, Amazon decided ‘clarifying’ the enrollment process was not the ‘right approach’ because it would case a ‘shock’ to business performance,” according to the amended complaint.

The named executives were among those accused of resisting changes that would have made membership cancellation simpler. The FTC said the company put customers through a process, which was called “Iliad” within the company after the Homer epic of the same name, meant to dissuade them from leaving the program. Officials noted that Amazon revamped its cancellation process for some before the FTC filed its initial complaint in June.

In June, an Amazon spokesperson said in a statement that the process to sign up for and leave Prime was “clear and simple” by design.

“The truth is that customers love Prime,” the statement read. “As with all our products and services, we continually listen to customer feedback and look for ways to improve the customer experience, and we look forward to the facts becoming clear as this case plays out.”

The lawsuit against Amazon comes as the FTC prepares to file a monopoly lawsuit against the company, accusing it of anticompetitive practices, The Wall Street Journal reported.