Amazon has reached a landmark $2.5 billion settlement with the Federal Trade Commission to resolve a two-year civil suit over its Prime subscription practices. The agreement, announced on September 25, requires the company to pay a $1 billion civil penalty and provide $1.5 billion in refunds to affected consumers.
The FTC alleged that Amazon and several executives violated federal law by using deceptive user interfaces and confusing design elements, known as “dark patterns,” to trick millions of consumers into enrolling in Prime without their consent. The commission also accused the company of deliberately complicating the cancellation process. The settlement mandates that Amazon cease these unlawful enrollment and cancellation practices.
According to the FTC, this is the largest civil penalty ever secured for a rule violation and the second-highest restitution award in the agency’s history.
“The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription,” said FTC Chairman Andrew N. Ferguson. “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
Eligible subscribers who enrolled in Prime between June 23, 2019, and June 23, 2025, are entitled to a refund, which is capped at $51 per customer.
Payouts will occur in two phases. The first group, consisting of subscribers who enrolled through what the FTC called a “challenged enrollment flow” and used three or fewer Prime benefits in any 12-month period, will receive automatic payments within 90 days. The second group of eligible consumers will be required to complete a form after the initial payout period concludes.
In response to the settlement, Amazon maintained its innocence. “Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers,” said spokesperson Mark Blafkin. “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members.”
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