Arizona sues Amazon, alleging violations of consumer fraud and antitrust laws

Workers sort packages at the Amazon AGS5 facility on Oct. 27, 2022, in Appling, Georgia. Photo by Sean Rayford | Getty Images

Arizona Attorney General Kris Mayes is suing online retail giant Amazon, alleging in a pair of lawsuits that its “unfair and deceptive” business practices have violated both the state’s consumer fraud and antitrust laws. 

The two separate lawsuits come as the Federal Trade Commission is gearing up for an October 2026 trial against Amazon for alleged federal antitrust violations. 

“[W]hile the Attorney General believes that the FTC has a strong case against Amazon, there were also good claims to make under Arizona’s consumer fraud and antitrust statutes, and decided that was the best course of action for the state to take,” Richie Taylor, a spokesman for Mayes, said in an email to the Arizona Mirror. 

The two suits target different aspects of Amazon’s business. The consumer fraud suit focuses on the way the company allegedly uses deceptive tactics to prevent users from canceling their Amazon Prime memberships, while the antitrust suit centers on how the company punishes sellers who price their products lower than Amazon does. 

“Amazon’s anti-competitive and monopolistic practices have artificially inflated prices for Arizona consumers and harmed smaller third-party retailers that rely on its platform,” Mayes said in a press release. “Amazon must be held accountable for these violations of our state laws. No matter how big and powerful, all businesses must play by the same rules and follow the same laws as everyone else.”

Amazon sharply criticized Mayes, saying the attorney general filed the lawsuits “without reviewing a single document from Amazon, resulting in a fundamental misunderstanding and mischaracterization of how Amazon’s businesses work.”

“These suits 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,” Amazon spokesman Tim Doyle told the Mirror.

But Richie Taylor, a spokesman for Mayes, disputed that.

“Before filing these lawsuits, the State considered information and facts from a congressional investigation, EU investigations, pleadings in other pending cases, the FTC’s actions, research by legal counsel, as well as information provided by Amazon,” he said.

Dark patterns

The consumer fraud lawsuit alleges that Amazon used “dark patterns” to deceive consumers who were attempting to cancel their Prime membership. The phrase, which refers to user interface designs that use ambiguous language or tactics, has gained increased attention due to the FTC lawsuit that makes similar claims. 

Internal Amazon documents obtained by Business Insider, which are referenced in Mayes’ suit, showed that employees knew they were deliberately confusing consumers. The FTC also claims that Amazon executives used the encrypted messaging app Signal, which can automatically delete  messages, to destroy crucial evidence. 

The documents detailed an internal Amazon program called “Project Iliad,” named after the sprawling Greek epic poem about the Trojan War. Launched in 2016, it resulted in a 14% reduction in cancellations by 2017. One key feature of the project was to force users to click through multiple screens to confirm their cancellation, each time using slightly different language and utilizing a scheme referred to as a “roach motel” to trap users in a redundant cycle of user interfaces. 

Similar practices and “dark patterns” were among the allegations former Attorney General Mark Brnovich made in his lawsuit against Google, where the state argued that the company used the methods to prevent users from opting out of location tracking data. 

“After clicking on the ‘End Membership’ button, canceling a Prime subscription further required multiple clicks, decisions, and confirmations,” the suit says. “Prime members were required to navigate as many as six additional webpages, and along the way Amazon provided confusing or manipulative messages.”

Amazon is facing a number of legal challenges from federal and state authorities, as well as a class action lawsuit brought by Prime members over price increases to their ad-free video platform. 

The suit alleging Amazon used “dark patterns” in its subscription cancellation process claims the company violated the state’s consumer fraud act and Mayes is asking the court to find Amazon liable for that alleged violation. 

The ‘Buy Box’

The second lawsuit Mayes filed focuses on practices that have been facing scrutiny by consumers and other legal authorities. 

On Amazon, there is a part of the website called the “Buy Box.” It is located on the right side of an Amazon product page and allows a user to click “add to cart,” which begins the checkout process. Not all products have a “Buy Box.” 

Approximately 80% of all transactions on the site happen through the “Buy Box,” and products without one can still be purchased. However, Mayes contends that this part of the experience is being used to punish third-party sellers on the site. 

Previously, Amazon had a “price parity clause” in their agreements, which stipulated that sellers using Amazon’s platform could not sell their product for cheaper on their own site or sites outside of Amazon. The company faced scrutiny for this practice, which led to it being rolled back in the European Union and eventually the United States. 

In her lawsuit, Mayes contends that new policies put in place by Amazon act as a “de facto” price parity clause. 

“Specifically, Amazon began interpreting its ‘Brand Standards,’ a so-called ‘Fair Pricing’ Policy, and a ‘Seller Code of Conduct’ to make it a ‘violation’ for a third-party seller to sell an item off Amazon for less than it sells the same item on Amazon,” the suit alleges. “In other words, if an Arizona business owner sells a sweater on Amazon for $50, Amazon deems it a ‘violation’ of the [Business Service Agreement] for the business owner to sell the same sweater on her own website for $45—even though she is not paying fees to sell via her own site.”

A violation can lead to your product having its buy box removed or preventing the product from being eligible for Prime, the suit says. 

Furthermore, the AG contends that Amazon’s use of its fulfillment centers to send Prime products to consumers also creates unfair practices, as third-party retailers have to use Amazon’s own fulfillment centers in order to be Prime eligible. Additionally, many of those products are competing with Amazon’s own product lines, which are always Prime eligible. 

“Amazon partners with more than 37,500 independent authors and small- and medium-sized businesses in Arizona to sell books and other products on Amazon Marketplace. Arizona third-party sellers generate an estimated $134 million revenue per year,” the suit says. 

What Mayes is alleging is similar to a class action lawsuit that claims that Amazon uses an algorithm to hide cheaper products and choose a “winner” that goes in the Buy Box and is granted additional real estate on the website. 

The suit alleges that Amazon violated the state’s antitrust and consumer fraud laws and asks the court to prevent the company from engaging in similar actions in the state, as well as fine the company for the violations. 

Prior to his departure, AG Brnovich and Google settled out of court for a record-breaking $85 million a month before going to trial.

***UPDATE: This story was updated to include additional comments from Amazon and the Attorney General’s Office.

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