Amazon agreed to pay a record $2.5 billion to settle its lawsuit with the Federal Trade Commission (FTC), which alleged the tech giant enrolled users in Prime without their consent and made cancellation difficult. The settlement includes $1 billion in civil penalties and $1.5 billion in customer refunds. Amazon must also stop these “deceptive” practices, the FTC announced.
“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. Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again,” FTC Chairman Andrew Ferguson said in a statement.
The settlement amount is less than 1% of Amazon’s total revenue from last year, Fox Business reported.
The FTC alleged that Amazon used misleading website designs to enroll consumers in Prime without their informed consent and created a complex cancellation process designed to discourage users from terminating their memberships.
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Internal concerns and settlement details
According to the FTC, internal Amazon documents revealed that executives and employees were aware of the deceptive practices around Prime enrollment and cancellation. Some acknowledged the unethical nature of the tactics, using phrases like “subscription driving is a bit of a shady world” and referring to unwanted subscriptions as “an unspoken cancer.”
The lawsuit was unexpectedly settled shortly after the trial began in Seattle. The FTC called the resolution the “largest ever in a case involving an FTC rule violation.”
Amazon did not admit to wrongdoing.
“Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers,” the company said in a statement. “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 around the world. We will continue to do so, and look forward to what we’ll deliver for Prime members in the coming years.”
Refunds and political response
Millions of Amazon Prime members from mid-2019 to mid-2025 who used the service three times or fewer per year are set to automatically receive refunds of up to $51. Others who do not receive automatic refunds will be able to file claims for reimbursement.
The FTC filed the lawsuit in 2023, claiming Amazon “tricked” users into signing up for automatically renewing Prime memberships using “dark patterns.” These patterns were described as deceptive design tactics meant to mislead users into making decisions they might not have made with clearer information.
Sen. Elizabeth Warren, D-Mass., criticized the settlement, calling it a “slap on the wrist.”
“The Trump administration’s settlement fails to hold Amazon executives accountable for their actions,” she wrote in a post on X.
According to The Washington Post, which is also owned by Amazon’s founder, Jeff Bezos, Amazon has 30 days to inform eligible customers that they can apply for a refund. The company will send instructions by email and regular mail, as well as post notices to its website and app.
