Amazon has agreed to pay $2.5 billion to settle accusations it tricked millions of customers into subscribing to Prime and made it difficult for them to cancel.
The $2.5 billion settlement will be split into two different pools. Amazon will have to pay $1 billion in civil penalties — the second largest fine in FTC history.
In the lawsuit, first filed by the FTC in 2023, the agency accused Amazon of duping people into automatically renewing their Amazon Prime subscriptions through “manipulative, coercive, or deceptive user-interface designs.”
Amazon also made it complicated for people to end their membership, the lawsuit said.
“Today, the Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel,” said FTC Chairman Andrew N. Ferguson.
“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. The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”
Amazon didn’t admit guilt by agreeing to the settlement.
Mark Blafkin, an Amazon spokesperson, said the company and its executives “have always followed the law and this settlement allows us to move forward and focus on innovating for customers.”
“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,” he said in a statement.
As part of the settlement, Amazon agreed to pay a $1-billion civil penalty and $1.5 billion to provide relief to roughly 35 million customers who were enrolled in Prime without their consent or had trouble canceling their subscriptions.
The historic monetary judgment contained in the settlement is only the third ROSCA case in which the FTC has obtained a civil penalty. It includes:
- $1.5 billion in consumer redress, providing full relief for the estimated 35 million consumers impacted by unwanted Prime enrollment or deferred cancellation. This is the second-highest restitution award ever obtained by FTC action.
- a $1 billion civil penalty, which is the largest ever in a case involving an FTC rule violation;
Additionally, the settlement requires Amazon to stop their unlawful practices and make meaningful changes to the Prime enrollment and cancellation flows by:
- including a clear and conspicuous button for customers to decline Prime. Amazon can no longer have a button that says, “No, I don’t want Free Shipping.”
- including clear and conspicuous disclosures about all material terms of Prime during the Prime enrollment process, such as the cost, the date and frequency of charges to consumers, whether the subscription auto-renews, and cancellation procedures.
- creating an easy way for consumers to cancel Prime, using the same method that consumers used to sign up. The process cannot be difficult, costly, or time-consuming and must be available using the same method that consumers used to sign up;
- paying for an independent, third-party supervisor to monitor Amazon’s compliance with the consumer redress distribution process.
Amazon now will have to create a website that provides consumers with information about the settlement, their rights and instructions for submitting a claim to obtain money.
The company is also required to send a claim form to all eligible customers who were enrolled in Prime without their consent or failed to cancel their subscription between June 23, 2019, and June 23, 2025.
In some cases, customers don’t need to submit a claim. Under the settlement, Amazon would automatically pay eligible customers up to $51 if they had subscribed to Amazon Prime through a “challenged enrolment flow” and had used no more than three Prime benefits in 12 months.
A “challenged enrolment flow” includes subscribing through any Prime decision page, the shipping option select page, Prime video enrolment or the single-page checkout, the order said.
