Arizona accuses Amazon of being a monopoly and deceiving consumers with ‘dark patterns’

Arizona Attorney General Kris Mayes filed two new lawsuits against Amazon on Wednesday, bringing similar complaints to those the company is already facing from the Federal Trade Commission.

Both of the lawsuits are brought under Arizona’s own state statutes in the Superior Court of Arizona. One of the lawsuits accuses Amazon of engaging in deceptive business practices that violate the state’s Consumer Fraud Act by allegedly using design tricks known as dark patterns to keep users from canceling their Amazon Prime subscriptions. This is similar to a lawsuit the FTC filed against the company in June.

The other lawsuit accuses Amazon of breaking Arizona’s Uniform State Antitrust Act by unfairly maintaining monopoly status by enforcing agreements with third-party sellers that restrict them from offering lower prices off of the platform than they do on Amazon. This kind of language, sometimes called a “most favored nation” clause, has also been targeted by other state AGs, including in the District of Columbia and California. (The DC case was thrown out, but the AG is trying to get it reinstated.)

The Arizona antitrust suit also targets Amazon’s Buy Box algorithm through the Consumer Fraud Act. That algorithm is the system that determines which product in a category gets the best placement with a “Buy Now” button. The AG alleges this algorithm is “biased in favor of Amazon first-party retail offers or offers from third-party sellers who participate in Fulfillment By Amazon.” Because of this, the AG argues, consumers reasonably believe items with the Buy Box offer the best price, but in reality, they “routinely overpay for items that are available at lower prices from other sellers on Amazon … because Amazon has chosen to display the offers for which it will earn the highest fees.” Both aspects of this lawsuit are reflected in the FTC’s recent antitrust lawsuit against Amazon, where it’s joined by more than a dozen state AGs.

Arizona is asking the court to stop Amazon from engaging in the allegedly deceptive and anticompetitive practices and award civil penalties and disgorgement of ill-gotten gains.

Amazon spokesperson Tim Doyle said the company was “surprised and disappointed by these cases” and said the Arizona AG initiated without reviewing “a single document from Amazon, resulting in a fundamental misunderstanding and mischaracterization of how Amazon’s businesses work.” Doyle defended Prime’s sign-up and cancellation processes, saying they are “clear and simple by design” and said the lawsuits would “force Amazon to engage in practices that actually harm consumers and the many businesses that sell in our store—such as having to feature higher prices.”

Update May 15th: This article has been updated to include a statement from Amazon.