PHOENIX (CN) — Arizona’s attorney general had a second go at Amazon’s business practices this week, this time arguing that Amazon’s complex subscription cancellation process violates the Arizona Consumer Fraud Act.
In a Phoenix courtroom Friday morning, Amazon lawyers fended off claims from Attorney General Kris Mayes that the online marketplace intentionally makes it too difficult to cancel Amazon Prime memberships by repeatedly asking users if they are sure, sending them to new pages that encourage consumers to change their minds and maintain the $14.99 per month subscription.
Amazon argues in a motion to dismiss that the complaint fails to allege a violation of state consumer fraud law because the act applies only to sales and advertisements, not management and operation of a business.
“Management of a subscription is not an advertisement or a sale,” defense attorney Moez Kaba said Friday morning.
The Hueston Hennigan attorney said the complaint contains no evidence that consumers have been tricked into continuing unwanted subscriptions — and that the attorney general has no authority to challenge the process.
“There’s no law in Arizona that dictates the number of steps,” required to cancel a subscription,” Kaba said. “The complaint simply does not get out of the starting block.”
Representing Mayes, Barbara Mahoney countered that the consumer fraud act does apply to subscription management, because a subscription is a recurring sale. She added that the prompts asking consumers to change their mind about their subscriptions are classified as advertisements, because they “induce or attempt to induce an obligation to incur an extended membership.”
In the complaint, Mayes claims Amazon uses “dark patterns” to exploit cognitive biases and manipulate consumer choices.
She points to internal Amazon documents regarding “Project Iliad,” the strategy Amazon employs to retain subscribers. The documents show the strategy reduced Prime cancellations by 14%.
But the company eliminated Project Iliad in April 2023, Kaba said, more than a year before Mayes filed the lawsuit. The Arizona Consumer Fraud Act carries a one-year statute of limitations for private actions.
Kaba said Mayes doesn’t qualify for an exemption to the statute of limitations because she has the authority only to bring a challenge on behalf of individuals, not the entire state.
Mahoney, of Hagens Berman law firm, disagreed, pointing to ARS 14-1528 and other statutes.
Kaba says Mahoney and Mayes are trying to fit a “square peg in a round hole” by expanding the consumer fraud act to allow for more than it does.
Maricopa County Judge Dewain Fox has 60 days to issue a ruling on Amazon’s motion to dismiss. He indicated after the hearing that it may take him that long to make a decision.
Friday’s legal squabble was the second this week between Mayes and the online shopping giant. On Thursday, Amazon pushed back on claims that the website’s algorithm deceives shoppers by presenting deals as though they’re the best available prices, while hiding better deals behind additional clicks or scrolling. Like Friday’s arguments, Amazon said Thursday that the complaint lacks evidence of actual deception.