In a landmark lawsuit settlement, Amazon has agreed to pay $2.5 billion to settle claims by the US Federal Trade Commission (FTC) that it misled millions of customers into enrolling in its Prime membership and tried to block cancellation efforts.
The agreement, announced on September 27, includes $1.5 billion in refunds for affected consumers, making it the largest civil penalty ever secured by the FTC.
The settlement follows a trial in Seattle, where the FTC accused Amazon of using manipulative tactics, such as checkout pop-ups urging customers to join Prime without clear disclosure of terms or easy opt-out options. The agency also criticised Amazon’s one-month Prime trials, which automatically enrolled users into paid subscriptions without clear warnings. These practices, deemed violations of consumer protection laws, affected an estimated 35 million US customers between June 2019 and June 2025, with eligible refunds up to $51.
Amazon neither admits nor denies in landmark lawsuit settlement
Amazon, which neither admitted nor denied the allegations, stated it has “always followed the law” and views the settlement as a chance to “move forward”. The company will refund customers who used Prime benefits fewer than three times annually without filing claims, while those with up to 10 uses must apply. Amazon must also simplify cancellation processes and eliminate misleading prompts like “No, I don’t want free shipping.”
FTC Chairman Andrew Ferguson hailed the settlement as a victory, ensuring “billions of dollars back into Americans’ pockets.” However, critics, including the American Economic Liberties Project, argue the FTC should reinstate a “Click-to-Cancel” rule, struck down earlier this year, to further protect consumers from deceptive subscription practices.
Amazon had already adjusted some practices amid the 2023 lawsuit filed under former FTC head Lina Khan. The settlement shows ongoing scrutiny of tech giants, albeit painfully slow, with both Khan and Ferguson advocating for stronger consumer protections. So far, there is no news on whether Amazon faces similar lawsuits in Europe or anywhere else in the world.
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