Amazon Settles FTC Allegations Over Prime Subscription Practices for $2.5 Billion

Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC) following allegations that the company enrolled consumers in Prime subscriptions without their consent and made the cancellation process challenging.

The settlement includes a $1 billion civil penalty and $1.5 billion in refunds to affected consumers. FTC Chairman Andrew N. Ferguson stated,

"Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again."

The FTC's investigation revealed that Amazon used deceptive user interfaces to lead consumers into enrolling in Prime without their knowledge and created a complex process for those attempting to cancel. Internal Amazon communications acknowledged these issues, with employees referring to subscription driving as "a bit of a shady world" and describing unwanted subscriptions as "an unspoken cancer."

As part of the settlement, Amazon is required to implement several changes:

• Provide a clear and conspicuous button for customers to decline Prime.

• Disclose all material terms of Prime during the enrollment process, including cost, charge dates, auto-renewal information, and cancellation procedures.

• Create an easy cancellation method using the same process consumers used to sign up.

• Fund an independent, third-party supervisor to monitor compliance with these policies.

Amazon spokesperson Mark Blafkin responded, stating,

"Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers."

Eligible consumers who were enrolled in Prime between June 23, 2019, and June 23, 2025, may receive automatic refunds of up to $51, depending on their usage of Prime benefits.