Amazon will pay $2.5 billion to settle Federal Trade Commission claims that it tricked millions of customers into Prime subscriptions and made cancellations unnecessarily difficult.
The deal, which includes $1.5 billion in reimbursements to consumers and $1 billion in fines, means roughly 35 million Prime customers are set to benefit from the settlement, with automatic $51 payments going to those who signed up between mid-2019 and mid-2025 but rarely used Prime benefits.
FTC Chairman Andrew N. Ferguson stated, “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. 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.”
The FTC statement read that Amazon “knowingly mislead millions of consumers into enrolling in Prime, violating the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).”
“The FTC alleged Amazon created confusing and deceptive user interfaces to lead consumers to enroll in Prime without their knowledge. Compounding these deceptive enrollment practices, Amazon documents discovered in the lead up to trial showed that Amazon executives and employees knowingly discussed these unlawful enrollment and cancellation issues, with comments like “subscription driving is a bit of a shady world” and leading consumers to unwanted subscriptions is “an unspoken cancer.”
In a statement today, Amazon commented, “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.”
Amazon shares remained steady following the announcement.
By CEO NA Editorial Staff
