I‘Iliad, by Homer, recounts the six decisive days and six nights which enabled the Achaeans to win against the Trojans. Amazon engineers, who obviously have letters and a sense of humor, have dubbed “Iliad” the four-page, six-click procedure (plus fifteen options) required to unsubscribe from Amazon Prime service. A deliberately tedious procedure and intended to discourage defections.
This is at least the thesis defended by the Federal Trade Commission (FTC), the Federal Trade Commission responsible, in the United States, for enforcing competition law. Since the start of the investigation, in 2021, Amazon has changed its procedure and made separation possible in just two clicks. Nevertheless, this Wednesday, June 21, the FTC officially filed a complaint against Amazon. For the lawyer Lina Khan, president of the commission, the case is clear. “Amazon tricked and tricked people into coercive, recurring subscriptions without their consent,” she says.
Lina Khan took up arms against Amazon, like Achilles against Troy. As her war promises to be long and epic, she aims for the heart. Prime is indeed at the center of Amazon’s business model. For a modest sum, 70 euros per year in France, the subscriber is offered free delivery, a video service on the Internet, music galore, reading…
Loyalty is key
In other words, the equivalent of Netflix plus Spotify plus Deliveroo and others for much less. According to an estimate by JP Morgan bank, cited by the wall street journal, it would cost more than 1,000 dollars (910 euros) per year for the American user if he had to buy these services separately. The success obviously depends on the generosity of the offer. In the United States, almost three-quarters of households subscribe to Prime.
It is not out of the goodness of its soul that Amazon entices consumers in this way, but because it turns them into loyal customers. They will no longer look elsewhere since they have free delivery. On average, the Prime subscriber would buy twice as much as the others. In a mature business model like Amazon’s, loyalty is key. “Customers love Prime”defends Amazon, which rejects the FTC’s allegations and argues that it is very easy to unsubscribe.
It’s true, but the problem is elsewhere, and the fighter Lina Khan sees further. She has written research articles in which she advocates the dismantling of the firm. The question is basically the same as for Google, also pointed out: does having a quality service, even the best, justify depriving the consumer of choice by making competition impossible?