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

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. 

“While 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 did not immediately respond to a request for comment. 

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

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.