Amazon to pay $2.5 billion in FTC settlement over deceptive Prime program

Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission over allegations that it deceived tens of millions of customers into enrolling in Prime and deliberately made cancellation onerous. The case, filed in 2023, argued that Amazon used manipulative interfaces—often described as “dark patterns”—to enroll users in automatically renewing Prime subscriptions and that the process to cancel was intentionally complicated. A U.S. district court judge previously ruled that Amazon violated consumer-protection laws by collecting billing information before fully disclosing Prime terms, a decision that came as part of a separate ruling in the case. Amazon said it had already implemented changes and that the settlement allows the company to move forward and focus on serving customers.

Under the terms of the agreement, Amazon will pay a $1 billion civil penalty to the Federal Trade Commission and refund about $1.5 billion to roughly 35 million customers who were affected by unwanted Prime enrollment or deferred cancellation. The FTC said the penalty is the highest civil penalty in an FTC rule-violation case and the second-largest restitution award in the agency’s history. Eligible consumers may receive up to $51 each for the six-year period from June 23, 2019, to June 23, 2025, with refunds slated for those who enrolled through challenged enrollment flows or who unsuccessfully attempted to cancel. Customers will have up to 180 days to submit claims by email, postal mail, or the settlement website. The refund program also covers customers who used three or fewer Prime benefits in a 12-month window.

The settlement requires substantive changes to Prime’s enrollment and cancellation processes. Amazon must implement a clear and conspicuous button to decline membership, provide disclosures about auto-renewal and Prime pricing during sign-up, and offer an easier path to cancel. Amazon and its executives did not admit wrongdoing as part of the settlement, and the company said it had already adopted many of the changes called for by the FTC. The deal also leaves intact another FTC lawsuit filed in 2023 that alleges Amazon operates as an exploitative monopoly and unlawfully suppresses competition among online marketplaces; that suit is scheduled to go to trial in early 2027.

The executive-level details were a point of contention. The FTC had named Jamil Ghani, head of Amazon Prime, and Neil Lindsay, senior vice president of Amazon Health Services, as executives allegedly involved in delaying or reversing steps to make cancellation easier. U.S. District Court Judge John Chun previously indicated that those executives could be held individually liable if a jury sided with the FTC. The settlement, however, does not require any admission of guilt by the company or its leaders, and the executives are not automatically subject to separate penalties under the agreement.

Reaction to the settlement has been mixed among former commissioners and observers. FTC Chair Andrew Ferguson framed the agreement as a historic win, saying, “The Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.” Lina Khan, who led the agency during the Amazon case, criticized the settlement for not fully holding the company to account, posting on social media that a $2.5 billion fine is a “drop in the bucket” for Amazon and may relieve executives who knew they were harming customers. Former commissioner Alvaro Bedoya questioned whether the settlement truly addressed the full extent of the alleged misconduct. Others noted that the agreement is structured to last 10 years for Amazon and three years for the named executives, with questions remaining about whether any additional penalties or admissions would be required.

The political backdrop surrounding the FTC’s leadership has influenced how the agency has pursued large cases against tech platforms. The agency has operated with a tilt toward Republican appointees in recent months, even as it continues to pursue major consumer protection and antitrust actions. In parallel developments, the Supreme Court recently allowed former President Trump to proceed with firings of Democratic-era commissioners in a broader reshaping of the agency’s leadership and oversight. These dynamics add context to a settlement that, while significant in monetary terms, leaves several questions about accountability for executives and the scope of future enforcement.

For consumers, the settlement provides a defined path to restitution and a set of concrete changes to how Prime enrollments and cancellations operate. The FTC described the agreement as a way to curb “dark patterns” and ensure that Prime terms are clear at the moment of sign-up, with straightforward options to decline and cancel. The agency characterized the settlement as a milestone in protecting ordinary Americans from deceptive subscription practices, even as it continues to pursue other legal actions related to competition and marketplace practices.

In the broader market, the case underscores the ongoing tension between large technology platforms and regulators as U.S. policymakers seek to tighten safeguards for online services, including subscription-based programs. The $2.5 billion settlement is the largest of its kind involving a consumer-protection rule violation, while the restitution component marks a substantial, if not unprecedented, return to affected customers. The decision to settle rather than proceed to trial has left some observers questioning the scope of accountability, but it also resets the regulatory landscape for Prime and similar services.