The Federal Trade Commission announced Thursday a landmark settlement with Amazon over allegations that the company enrolled millions of consumers into Prime memberships without clear consent and intentionally made the cancellation process difficult.
The deal includes a $1 billion civil penalty — the largest ever in an FTC case involving a rule violation — and $1.5 billion in refunds for consumers who the agency says were harmed by deceptive Prime enrollment and cancellation practices. Amazon will also be required to overhaul its Prime sign-up and cancellation processes and submit to independent compliance monitoring.
“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,” FTC Chairman Andrew Ferguson said in a statement. “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
The case stems from a 2023 FTC complaint against Amazon. Earlier this month, a federal judge in Seattle ruled that Amazon violated online shopper protection law by collecting payment information before disclosing full Prime terms, a setback that loomed over the company as the trial began this week.
“Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers,” Amazon said as part of a statement. “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.”
The Seattle-based tech giant did not admit wrongdoing under the settlement. It previously argued Prime’s terms were clear and cancellations were accessible.
According to the FTC, Amazon employed confusing checkout flows and deceptive user interfaces — commonly described as “dark patterns”— to nudge shoppers into Prime sign-ups they didn’t expect. In parallel, the FTC alleged that Amazon created a complex cancellation process.
The settlement forces Amazon to redesign Prime’s enrollment interface — requiring clearer disclosures and a “clear and conspicuous button” to decline Prime. Amazon cannot have a button that says, “No, I don’t want Free Shipping.”
The FTC estimates 35 million consumers will be eligible for refunds.
Amazon Prime memberships cost $139/year or $15/month. Subscribers get discounts on shipping, video and music streaming, and other benefits.
Amazon doesn’t disclose specific Prime membership data. There were an estimated 197 million Amazon customers who had a Prime membership as of March 2025, according to Consumer Intelligence Research Partners — up about 7% from the June 2024 quarter.
Subscription services revenue, which includes Prime memberships, came in at $12.2 billion in the company’s most recent quarter, up 12% year-over-year. That accounted for about 7% of Amazon’s overall revenue in the quarter.
Amazon shares were down slightly on Thursday. The company has a market capitalization of nearly $2.4 trillion.
Read the full article here
