Following claims that it used dishonest tactics to sign up customers for its Prime membership and made cancellations unduly difficult, tech giant, Amazon has agreed to pay $2.5 billion to settle a lawsuit with the U.S. Federal Trade Commission (FTC).
Amazon was accused in the 2023 case of using deceptive design elements to trick customers into renewing their Prime memberships automatically. Additionally, the FTC asserted that the company purposefully erected barriers to make cancellations more difficult, even rejecting internal suggestions to streamline the procedure, effectively decreasing the number of customers who opted out.
Amazon will pay the federal government $1 billion in civil penalties and $1.5 billion in refunds to impacted customers as part of the settlement, which was reached soon after a trial started in Seattle. Depending on their use of Prime benefits, customers who signed up for Prime between the middle of 2019 and the middle of 2025 will automatically receive refunds of up to $51, while others may file claims to get reimbursement. The company must now provide more accessible and unambiguous cancellation options for its Prime service and refrain from using deceptive prompts, like buttons that suggest customers do not want free shipping.
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BrandSpur online news platform reports that the agreement was the second-highest restitution amount in the FTC’s history and the largest civil penalty in a case involving a violation of the commission rule. Amazon did not acknowledge any misconduct, even though the settlement ends the conflict. The business emphasised that the resolution enables it to concentrate on future innovations for its clients, stating that its sign-up and cancellation procedures have always been open and legal.
