Prime Controversy: Amazon to Pay $2.5 Billion Over Subscription Deception

Tech giant Amazon has reached a $2.5 billion settlement to resolve a legal dispute with the United States Federal Trade Commission (FTC), following allegations that the company used deceptive practices to enroll customers in its Prime subscription and made cancellations unnecessarily difficult.

The case, which originated in 2023, accused Amazon of employing manipulative design features that led shoppers into auto-renewing Prime memberships. The FTC also claimed that the company deliberately created obstacles to complicate cancellations, even dismissing internal recommendations to simplify the process, which effectively reduced the number of customers opting out.

Under the settlement, finalized shortly after a trial began in Seattle, Amazon will pay $1 billion in civil penalties to the federal government and $1.5 billion in refunds to affected customers. Shoppers who subscribed to Prime between mid-2019 and mid-2025 will automatically receive refunds of up to $51, depending on their usage of Prime benefits, while others may submit claims to obtain compensation.

Amazon is now prohibited from using misleading prompts, such as buttons implying that customers do not want free shipping, and must implement clearer and more accessible cancellation options for its Prime service.

The FTC described the agreement as the largest civil penalty in a case involving a commission rule violation and the second-highest restitution amount in its history. While the settlement resolves the dispute, Amazon did not admit any wrongdoing. The company stated that its sign-up and cancellation processes have always been transparent and lawful, emphasizing that the resolution allows it to focus on future innovations for its customers.