“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,” Ferguson said. “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
Amazon will pay $2.5 billion to settle claims that it misled members about its Prime program, manipulating tens of millions of people into paying for hard-to-cancel subscription.
According to National Public Radio, the settlement was announced earlier this week.
In a statement, Federal Trade Commission Chairman Andrew N. Ferguson cast the agreement as a “record-breaking, monumental win for millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.”
“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,” Ferguson said. “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
Under the terms of the proposed agreement, Amazon must create a “clear and conspicuous” button for consumers to decline Prime subscription offers when shopping on the platform. Amazon must also introduce an “easy way” for existing subscribers to cancel, should they choose to do so.
Earlier, in court, Amazon claimed that it has already improved its cancellation process, making most of the federal government’s claims void. Nonetheless, to resolve this litigation, Amazon will pay a total of $2.5 billion. Of that amount, $1 billion comes in the form of civil fines and penalties, while the remaining $1.5 billion will be distributed to and among affected consumers.
Payments to individual Prime subscribers, current and former, are expected to be about $51.
The terms of the settlement did not require Amazon to admit any wrongdoing.
In a statement announcing the settlement, Amazon went so far as to say that it and its executives “have always followed the law,” with the settlement allowing “us to move forward and focus on innovating for customers.”
The $1.5 billion in recompense will be shared by the millions of current and former Amazon Prime subscribers who paid for services at any time between mid-2019 and mid-2025.
The Federal Trade Commission, along with a coalition of at least 17 states, is continuing to press another, larger case against Amazon, accusing the company of functioning as an illegal monopoly. In that lawsuit, the FTC alleges that Amazon proactively punishes sellers that offer their products for lower prices elsewhere on the internet, and regularly coerces on-platform retailers into paying for Amazon’s delivery service.
“Amazon is monopolist and it is exploiting its monopolies in ways that leave shoppers and sellers paying more for worse service,” former FTC Chair Lina Khan said in a 2023 statement. “In a competitive world, a monopoly hiking prices and degrading service would create an opening for rivals and potential rivals to […] grow and compete. But Amazon’s unlawful monopolistic strategy has closed off that possibility, and the public is paying dearly as a result.”
Sources
Amazon to pay $2.5bn to settle FTC lawsuit over Prime ‘subscription traps’
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