Amazon has agreed to a record-breaking $2.5 billion settlement with the Federal Trade Commission over allegations that it misled customers into signing up for Prime subscriptions and made it unnecessarily difficult to cancel them.
The settlement, announced just days after a jury trial began in Washington, D.C., will see $1 billion go toward civil penalties and another $1.5 billion refunded to affected customers. Nearly 35 million consumers were impacted, with individuals eligible to receive up to $51 each.
FTC Chairman Andrew Ferguson hailed the decision as a “monumental win,” saying the evidence showed Amazon “used sophisticated subscription traps” to manipulate customers. According to the FTC, Amazon deliberately obscured cancellation options and designed sign-up pages that nudged users toward enrolling in Prime, often without clear consent.
As part of the agreement, Amazon must overhaul its subscription process. This includes introducing an unambiguous “decline Prime” button and simplifying account cancellation. The company will also undergo third-party audits to ensure compliance.
Amazon, while denying wrongdoing, said it had already implemented most of the required changes. A spokesperson emphasized the company’s commitment to providing value, stating, “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership.”
The case, which dates back to investigations launched during the Trump administration, underscores growing scrutiny of big tech practices. Alongside Meta and Ticketmaster, Amazon now joins the list of major companies forced to answer for consumer protection violations.