Amazon has agreed to pay $2.5 billion to resolve allegations that the company used deceptive tactics to enroll users in its Prime subscription service and intentionally created a complicated cancellation process.
The Federal Trade Commission (FTC) initiated the lawsuit in 2023, alleging that the e-commerce giant employed “manipulative and deceptive” designs.
According to the commission, the “sophisticated subscription traps” tricked shoppers into signing up for auto-renewing Prime memberships, which cost $139 annually or $14.99 per month.
The FTC further claimed that Amazon deliberately made it difficult for users to cancel their subscriptions to prevent them from leaving.
The agency also argued that Amazon even abandoned efforts to simplify the cancellation process after internal data showed that a more complex system led to fewer cancellations.
“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,” Andrew Ferguson, FTC chairman, said.
“Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
The settlement was reached just days after the trial began in a Seattle court.
As part of the agreement, Amazon will pay $1 billion in civil penalties to the government and $1.5 billion in refunds to affected customers.
Shoppers who paid for Amazon Prime between mid-2019 and mid-2025 are expected to automatically receive up to $51, while others can submit claims for refunds.
Their eligibility will depend on how many Prime benefits those shoppers used beyond free shipping.
Amazon will also be barred from using misleading buttons like “No, I don’t want free shipping” and must provide a simpler way for users to cancel Prime.
According to the FTC, the deal marks the largest civil penalty ever in a case involving an FTC rule violation, and the second-highest restitution award in its history.
AMAZON’S RESPONSE
However, Amazon has not admitted to any wrongdoing as part of the settlement.
In a statement, the company insisted it has “always followed the law” and that its Prime sign-up and cancellation processes are “clear and simple.”
“Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers,” the statement reads.
“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.
“We will continue to do so, and look forward to what we’ll deliver for Prime members in the coming years.”
