SEATTLE — Amazon has agreed to pay $2.5 billion to resolve allegations from U.S. regulators that it tricked millions of customers into enrolling in its Prime subscription program and made cancellation intentionally difficult.
The Federal Trade Commission (FTC) announced Thursday that the settlement includes a $1 billion civil penalty — the largest in the agency’s history — and $1.5 billion in refunds to roughly 35 million consumers who were either enrolled without clear consent or struggled to cancel.
The lawsuit, filed in June 2023, accused Amazon of deploying “manipulative, coercive, or deceptive” design tactics to encourage shoppers to auto-renew their Prime subscriptions, which cost $139 annually or $14.99 monthly. Regulators stated that Amazon also created a “convoluted” multi-step process to deter cancellations, even reversing plans to simplify the process after testing showed it reduced subscriber numbers.
Amazon denied any wrongdoing throughout the trial, arguing its enrollment and cancellation processes met or exceeded industry standards. Still, the company agreed to settle after three days of proceedings in federal court in Seattle, where a jury had been empaneled to hear the case.
As part of the settlement, Amazon must clearly disclose subscription terms, obtain express consent before charging for Prime, and provide a straightforward cancellation option. The agreement also bars two senior Amazon executives — Prime chief Jamil Ghani and health division executive Neil Lindsay — from engaging in similar conduct.
FTC Chairman Andrew Ferguson hailed the outcome as a “monumental win” for consumers, saying it signaled a new era of accountability for large tech platforms.
Launched in 2005, Prime now boasts more than 200 million members worldwide, offering free shipping and streaming services. The program has been a major driver of Amazon’s growth, with data showing Prime members spend significantly more than non-members.
Amazon still faces a larger federal antitrust lawsuit accusing it of operating as a monopoly, with trial expected in 2027 before the same judge.
