Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission over claims it tricked consumers into Prime via misleading sign-up flows and made cancellation burdensome.
Of the total, $1.5 billion will be distributed to affected users, while $1 billion is a civil penalty. Subscribers who enrolled between June 23, 2019, and June 23, 2025, via certain offers and used ≤3 Prime benefits in the first year are eligible for automatic $51 refunds. Others may apply for redress if they faced cancellation difficulties.
Amazon will implement reforms in UI and subscription design, including a clear “decline Prime” button and simpler cancellation options, under supervision by an independent monitor. The settlement avoids admission of guilt by Amazon.
Implications & Reactions
- The settlement is one of the largest consumer restitution orders ever by the FTC.
- It could push other subscription-based services to audit and improve their interface practices.
- Legal questions remain about whether Amazon’s reforms go far enough or whether further litigation is possible.
