Amazon can pay a $2.5 billion settlement to resolve a case alleging it misled hundreds of thousands of shoppers into buying Prime subscriptions.
Amazon has agreed to pay $2.5 billion to settle a Federal Commerce Fee (FTC) case alleging the corporate misled prospects into signing up for its Prime subscription service and made it tough for them to cancel.
On Sept. 25, the FTC introduced that Amazon can pay $1 billion in civil penalties—the biggest within the company’s historical past—and $1.5 billion in refunds to roughly 35 million prospects affected by what the company described as “misleading Prime enrollment practices.” Eligible prospects could obtain as much as $51 every. The settlement applies to prospects who signed up for Prime through Amazon’s “Single Web page Checkout” between June 23, 2019, and June 23, 2025.
In an announcement, FTC Chairman Andrew Ferguson known as the settlement a “monumental” win. He mentioned it returns billions of {dollars} to customers whereas stopping Amazon from participating in the identical practices sooner or later.
“The proof confirmed that Amazon used subtle subscription traps designed to govern customers into enrolling in Prime, after which made it exceedingly onerous for customers to finish their subscription,” Ferguson mentioned in an announcement. “Right this moment, we’re placing billions of {dollars} again into Individuals’ pockets, and ensuring Amazon by no means does this once more.”
Amazon didn’t admit wrongdoing as a part of the settlement. The settlement was reached as Amazon was going through a federal trial over its potential violation of the Restore On-line Customers’ Confidence Act and different client safety guidelines.
The FTC started investigating Prime enrollment practices in 2021 in the course of the first Trump administration, and the lawsuit that led to the federal trial was filed in 2023 below former Chair Lina Khan.
The FTC accused Amazon of utilizing manipulative internet designs to enroll tens of hundreds of thousands of customers in Prime with out clear consent and making cancellation deliberately tough.
Inside Amazon paperwork referenced by the company described the method as “Iliad,” likening it to the prolonged siege within the Greek epic, and famous workers referred to subscription ways as “a little bit of a shady world” and “an unstated most cancers.”
The settlement resolves the FTC’s case concerning misleading enrollment and cancellation practices, however Amazon faces one other federal lawsuit wherein the company, joined by attorneys common from 17 states, is accusing the corporate of monopolistic practices in e-commerce. That trial is scheduled for early 2027.
In an emailed assertion to The Epoch Instances, Amazon spokesman Mark Blafkin mentioned the corporate and its executives have “all the time adopted the regulation.”
“This settlement permits us to maneuver ahead and concentrate on innovating for patrons,” Blafkin wrote. “We work extremely onerous to make it clear and easy for patrons to each join or cancel their Prime membership, and to supply substantial worth for our many hundreds of thousands of loyal Prime members all over the world. We are going to proceed to take action, and sit up for what we’ll ship for Prime members within the coming years.”
In an e mail to The Epoch Instances, Amazon mentioned that it felt the information and regulation had been on its aspect however {that a} settlement made sense so the corporate may as an alternative focus its vitality on its enterprise.
As a part of the settlement, Amazon should present a transparent and conspicuous button for patrons to say no Prime, absolutely disclose all subscription phrases throughout enrollment, and make it simple and cost-free for patrons to cancel utilizing the identical technique they used to enroll. An impartial third-party monitor will oversee the corporate’s compliance.
Amazon advised The Epoch Instances that the necessities of the settlement largely mirror the sign-up and cancellation course of that the corporate has used for a number of years and don’t replicate an extra change.
Amazon Prime, launched in 2005, has grown to greater than 200 million members worldwide. Membership prices $139 yearly or $14.99 per 30 days and supplies advantages similar to free delivery, video streaming, and reductions at Complete Meals.
In its newest earnings launch, Amazon reported greater than $12 billion in subscription income for the second quarter of 2025, a 12 % enhance from the earlier yr.
Reuters contributed to this report.
In the event you discovered this text fascinating, please think about supporting conventional journalism
Our first version was revealed 25 years in the past from a basement in Atlanta. Right this moment, The Epoch Instances brings fact-based, award-winning journalism to hundreds of thousands of Individuals.
Our journalists have been threatened, arrested, and assaulted, however our dedication to impartial journalism has by no means wavered. This yr marks our twenty fifth yr of impartial reporting, free from company and political affect.
That’s why you’re invited to a limited-time introductory supply — simply $1 per week — so you possibly can be part of hundreds of thousands already celebrating impartial information.
