I’m a Billing & Revenue Solution Architect, and I’ve seen some things. But nothing hits quite like the Amazon FTC settlement in September 2025. The company paid a historic $2.5 billion, the largest consumer protection settlement in recent Federal Trade Commission history. Why? They enrolled 35 million people in Prime without clear consent and made cancellation deliberately difficult.
I still can’t get over the internal code name for their cancellation flow: ‘Iliad’. They named their process after Homer’s epic odyssey because it was supposed to be a labyrinth. Six screens, multiple retention offers, and ambiguous button labels – click the wrong thing, and you’ll have to start all over. That code name became evidence in court.
Think of Sarah Chen. She just wanted fast shipping for her daughter’s gift. She thought she was starting a free trial. Eighteen months later, Amazon had charged her $14.99 a month for a service she didn’t know she had. When she tried to cancel, she encountered the Iliad maze.
The numbers are terrifying. Thirty-five million consumers were impacted. The settlement breaks down like this: $1.5 billion in consumer refunds ($42.86 per person) and $1 billion in civil penalties ($28.57 per person). That’s a total cost of $71.43 per affected subscriber.
To put this in perspective for businesses of different sizes:
- A company with 100,000 subscribers, where only 5% encounter unclear flows, could face a potential exposure of approximately $357,150.
- For a business with one million subscribers, that figure rises to $3.57 million.
These numbers only reflect the settlement itself. Under the FTC’s civil penalty authority, the theoretical maximum exposure is far higher – exceeding $1.8 trillion ($53,088 per violation multiplied by 35 million affected subscribers).
This Is Not Just an Amazon Problem
We saw a similar pattern when Adobe faced FTC action in 2024 for hiding early termination fees (ETFs). Their “annual plan, paid monthly” subscription hid an ETF equal to 50% of the remaining contract value. Planet Fitness settled class action lawsuits because they required in-person cancellation despite allowing online enrollment.
The pattern is crystal clear: retention built on user friction is now a massive billion-dollar regulatory liability.
Red flags from Amazon’s approach to retention:
- They deliberately designed confusing flows. Internal code names like “Iliad” served as evidence that retention strategies were deliberately designed to confuse users.
- They measured confusion. A/B tests explicitly measured how many users could be “saved” through confusing flows.
- They ignored warnings. Between 2016 and 2023, customer complaints rose 300%, but leadership prioritized retention metrics over user experience, dismissing repeated internal alerts.
These examples show that regulatory scrutiny is not hypothetical. Even after the FTC’s “Click-to-Cancel Rule” (16 CFR Part 425) was canceled in July 2025 on procedural grounds, enforcement authority remains strong. The Amazon settlement demonstrates that the agency can still act under Section 5, which covers unfair or deceptive practices.
Importantly, the parity principle (cancellation must be as easy as enrollment) has now been established as enforceable precedent through a consent decree. Companies can no longer rely on procedural technicalities, and regulators can intervene whenever subscription flows create undue friction for users.
Dark Patterns Hiding in Your Billing System
Retention isn’t determined by a button color on a landing page. It’s shaped by how a billing system handles critical moments. The global subscription market exceeds $700 billion annually, and in the push for recurring revenue, behavioral principles are sometimes pushed into manipulative territory, employing destructive psychological tactics. Regulators call these dark patterns.
Here are four common dark patterns I’ve seen lurking in system logic:
1. The Roach Motel or Forced Continuity
- What it looks like: A free trial converts to paid automatically without any clear advance notification. The user finds the charge weeks later.
- Architecture implementation: Renewal logic triggers payment on day 7 or 30 of the trial, but you didn’t architect an advance notification workflow or log its delivery.
- Why it’s a dark pattern: It exploits inertia bias. The FTC calls it “forced continuity”.
- Regulatory Risk: FTC Section 5 violation ($53,088 per affected subscriber).
Self-check for your company – can your system flag a subscription for manual review and halt auto-charges if advance notifications fail (e.g., bounced email)?
2. The Price Creep
- What it looks like: A free trial converts to a premium tier by default, while the user expected the basic plan. The first charge is $49 instead of $9.
- Architecture implementation: The default renewal tier is hardcoded to the highest-margin option, rather than matching the user’s trial selection.
- Why it’s a dark pattern: Silent upgrades violate user expectations of continuity, misleading users into paying more than they agreed to.
- Regulatory risk: EU Digital Services Act interface manipulation penalties (up to 6% of global revenue).
Self-check for your company – does the default renewal tier match the user’s trial tier?
3. The Multi-Screen Maze
- What it looks like: Cancellation requires navigating through multiple screens and confirmation steps. Settings → Account → Billing → Manage → Cancel → Confirm.
- Architecture implementation: The cancellation endpoint is embedded in multiple navigation layers with repeated confirmations.
- Why it’s a dark pattern: Excessive steps create friction that discourages cancellation, violating the FTC parity principle.
- Regulatory risk: Direct violation of the FTC parity requirement (enforced via Section 5).
Self-check for your company – count clicks and time required. If it exceeds 60 seconds or three steps, the flow risks non-compliance.
4. The Odyssey of Cancellation
- What it looked like: Six screens to cancel, a low-contrast “Cancel Membership” button, retention offers that reset the flow if the wrong option was clicked, ambiguous language like “End now” vs. “End benefits later,” and device-specific variations that made mobile flows worse than desktop.
- Architecture implementation: Cancellation endpoint designed with deliberate obstacles; testing measured how effectively the flow retained users.
- Why it’s a dark pattern: Combines multiple manipulative tactics – visual, structural, and linguistic – to intentionally confuse and trap users.
- Regulatory risk: Serves as the blueprint for modern FTC enforcement; companies replicating similar flows face high regulatory exposure.
Self-check for your company – any internal code names hinting at difficulty? Were A/B tests run to optimize cancellation friction? Both indicate deliberate manipulation.
Your Slack Messages Are Evidence
These dark patterns don’t exist in isolation. Every confusing button, misleading label, and multi-screen maze is designed, tested, and often defended internally. And when regulators start looking, they examine it all – conversations, notes, and internal code names that show why the system was built that way.
If regulators subpoena your internal communications, what story will they tell?
Imagine if your teams joked about “keeping users trapped” or dismissed complaints as “user error.” Those messages aren’t harmless chatter. Regulators can interpret them as evidence that retention strategies were deliberately designed to confuse.
UX tweaks or legal updates won’t fix it. The real issue lies in architecture. As a Billing & Revenue Solution Architect, I’ve seen these retention issues embedded in the logic of auto-renewal systems, dunning workflows, and consent databases. When a billing system is configured to confuse, that entire architecture is structurally flawed and will fail compliance.
That’s why I created what I call the Ethical Retention Matrix. It’s a framework I use to assess whether a billing system respects four key principles: Transparency, Autonomy, Reciprocity, and Compliance. These are measures to see if the system itself is designed ethically, from the ground up.
In the next article, I’ll show how to audit your system and turn ethical billing into a competitive advantage. When retention is designed responsibly, customers stay – not because they’re trapped, but because they choose to.