Amazon pays a $2.5 billion settlement to resolve a case alleging it misled tens of millions of consumers into buying Prime subscriptions.
Amazon has agreed to pay $2.5 billion to settle a Federal Commerce Fee (FTC) case alleging the corporate misled clients into signing up for its Prime subscription service and made it tough for them to cancel.
On Sept. 25, the FTC introduced that Amazon pays $1 billion in civil penalties—the most important within the company’s historical past—and $1.5 billion in refunds to roughly 35 million clients affected by what the company described as “misleading Prime enrollment practices.” Eligible clients could obtain as much as $51 every. The settlement applies to clients who signed up for Prime by way of Amazon’s “Single Web page Checkout” between June 23, 2019, and June 23, 2025.
In a press release, FTC Chairman Andrew Ferguson known as the settlement a “monumental” win. He stated 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 refined subscription traps designed to control customers into enrolling in Prime, after which made it exceedingly exhausting for customers to finish their subscription,” Ferguson stated in a press release. “In the present day, we’re placing billions of {dollars} again into People’ 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 Buyers’ Confidence Act and different shopper 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 beneath former Chair Lina Khan.
The FTC accused Amazon of utilizing manipulative internet designs to enroll tens of tens of millions 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 staff referred to subscription techniques 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 through which the company, joined by attorneys normal 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 stated the corporate and its executives have “at all times adopted the legislation.”
“This settlement permits us to maneuver ahead and deal with innovating for patrons,” Blafkin wrote. “We work extremely exhausting to make it clear and easy for patrons to each join or cancel their Prime membership, and to supply substantial worth for our many tens of millions of loyal Prime members world wide. We’ll proceed to take action, and look ahead to what we’ll ship for Prime members within the coming years.”
In an e-mail to The Epoch Instances, Amazon stated that it felt the information and legislation have been on its facet however {that a} settlement made sense so the corporate might as an alternative focus its power 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 methodology they used to enroll. An impartial third-party monitor will oversee the corporate’s compliance.
Amazon instructed 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 mirror a further change.
Amazon Prime, launched in 2005, has grown to greater than 200 million members worldwide. Membership prices $139 yearly or $14.99 per thirty days and gives advantages equivalent 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 % improve from the earlier yr.
Reuters contributed to this report.
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