Amazon can pay a $2.5 billion settlement to resolve a case alleging it misled hundreds of thousands 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 can pay $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 “deceptive Prime enrollment practices.” Eligible clients might obtain as much as $51 every. The settlement applies to clients who signed up for Prime through Amazon’s “Single Page Checkout” between June 23, 2019, and June 23, 2025.
In an announcement, FTC Chairman Andrew Ferguson referred to as the settlement a “monumental” win. He mentioned it returns billions of {dollars} to customers whereas stopping Amazon from partaking in the identical practices sooner or later.
“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,” Ferguson mentioned in an announcement. “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
Amazon didn’t admit wrongdoing as a part of the settlement. The settlement was reached as Amazon was dealing with a federal trial over its potential violation of the Restore On-line Customers’ Confidence Act and different shopper safety guidelines.
The FTC started investigating Prime enrollment practices in 2021 throughout the first Trump administration, and the lawsuit that led to the federal trial was filed in 2023 underneath former Chair Lina Khan.
The FTC accused Amazon of utilizing manipulative net 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 bit of a shady world” and “an unspoken cancer.”
The settlement resolves the FTC’s case concerning misleading enrollment and cancellation practices, however Amazon faces one other federal lawsuit during 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 Occasions, Amazon spokesman Mark Blafkin mentioned the corporate and its executives have “always followed the law.”
“This settlement allows us to move forward and focus on innovating for customers,” Blafkin wrote. “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.”
In an electronic mail to The Epoch Occasions, Amazon mentioned that it felt the information and regulation had been on its aspect however {that a} settlement made sense so the corporate might 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 Occasions 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 monthly and gives advantages resembling 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 p.c enhance from the earlier yr.
Reuters contributed to this report.
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