Amazon to pay $2.5 billion to settle allegations it duped people into subscribing to Prime
Amazon has agreed to pay $2.5 billion to settle accusations that the e-commerce giant tricked millions of customers into subscribing to Prime and made it tough for them to cancel.
The company would pay up to $51 each to eligible customers who qualify for the payment.
The settlement stems from a lawsuit that the Federal Trade Commission filed against Amazon in a U.S. District Court in Seattle in 2023. The agency, which protects consumers from unfair business practices, accused Amazon of duping people into automatically renewing their Amazon Prime subscriptions through “manipulative, coercive, or deceptive user-interface designs.” Amazon also made it complicated for people to end their membership, the lawsuit said.
A trial over the lawsuit, filed under the Biden administration, kicked off in Seattle this week. The settlement is among one of the largest FTC settlements and is another example of how the federal government has been trying to rein in the power wielded by Big Tech.
“Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again,” said FTC Chairman Andrew Ferguson in a statement. “The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”
Amazon didn’t immediately respond to a request for comment.
As part of the settlement, Amazon agreed to pay a $1-billion civil penalty and $1.5 billion to provide relief to roughly 35 million customers who were enrolled into Prime without their consent or had trouble canceling their subscriptions, according to a news release from the FTC.
Amazon would also have to make design changes, under the settlement, including clearly providing a button to decline Prime instead of having customers click “No, I don’t want Free Shipping.” Consumers would also have a way to quickly cancel their Prime membership without it being “difficult, costly, or time-consuming.”
Amazon would create a website that provides consumers information about the settlement, their rights and instructions for submitting a claim to obtain money.
The company would also send a claim form to all eligible customers who were enrolled in Prime without their consent or failed to cancel their subscription between June 23, 2019, and June 23, 2025.
In some cases, customers don’t need to submit a claim. Amazon would automatically pay eligible customers up to $51 who subscribed to Amazon Prime through a “challenged enrollment flow” and who used no more than three Prime benefits in 12 months, an order about the settlement said.
A “challenged enrollment flow” includes subscribing through any Prime decision page, the shipping option select page, Prime video enrollment or the single-page checkout, the order said.
Amazon’s share price is slightly down less than 1% at $219.24.
