General Kris Mayes recently filed two new lawsuits against Amazon.
The first accuses Amazon of using "dark patterns," or digital design tricks, that make it difficult for consumers to cancel their Prime subscriptions. According to the lawsuit, Amazon used misleading graphics and wording and emphasized the benefits of Prime before allowing consumers to cancel their subscriptions to the service, among other hurdles designed to exploit cognitive biases and influence a user's choices.
While the case was filed in state court under the Arizona Consumer Fraud Act, it is similar to the FTC's existing case against Amazon raising similar cancellation concerns. This new focus on Amazon is a reminder of states interest in targeting companies over so-called dark patterns and demonstrates again that states have separate authority to pursue concurrent actions even once the FTC pursues enforcement of the same issue.
The second lawsuit alleges antitrust violations over the "Buy Box" algorithm Amazon uses to determine which products get priority placement on the platform and the terms it imposes on its third-party sellers. Arizona also claims that Amazon has unlawfully maintained market dominance through illegal restrictions on third-party sellers. Seventeen state AGs and the FTC filed suit in September 2023 alleging similar conduct.
Sum it Up: These latest actions by Arizona add to the government actions against Amazon, which include:
- The Federal Prime Case: In June of 2023, the FTC filed a lawsuit alleging that Amazon used dark patterns that tricked consumers into enrolling in Prime subscriptions that would automatically renew and intentionally made it difficult for consumers to cancel those subscriptions. The case is ongoing.
- The Federal Antitrust Case: In September of 2023, the FTC and 17 state AGs sued Amazon alleging that it uses its monopoly power to inflate prices, degrade quality, and stifle innovation. That case is currently set for trial in October of 2026.
- The District of Columbia's Antitrust Case: In May of 2021, then Attorney General Karl Racine filed the inaugural suit against Amazon alleging its "most favored nation" agreements with third-party sellers violate the District of Columbia's Antitrust Act. Amazon won dismissal in 2022 but the AG's office has sought to revive it on appeal. A three-judge panel in the D.C. Court of Appeals heard arguments on whether the case was wrongfully dismissed in December. That appeal is ongoing.
- The California Antitrust Case: In September of 2022, Attorney General Rob Bonta announced a lawsuit alleging that Amazon's third-party seller agreements violated the California's Unfair Competition Law and Cartwright Act. The case survived a motion to dismiss and litigation is ongoing.
These interrelated but separate actions demonstrate that state consumer protection actions don't exist in a vacuum – antitrust cases sometimes are brought alongside more traditional consumer protection cases, and sometimes with or parallel to the FTC. And with Big Tech under attack under both umbrellas, we'll keep watching as these cases evolve.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.