FTC approves $2.5 billion settlement with Amazon over Prime enrollment practices
Agency says refunds totaling up to $1.5 billion and a $1 billion civil penalty will be issued to millions of customers; eligibility details outlined for affected users.
The Federal Trade Commission on Tuesday announced a $2.5 billion settlement with Amazon over Prime enrollment practices, a move aimed at reversing what the agency described as deceptive enrollment tactics. The package includes a $1 billion civil penalty and up to $1.5 billion in refunds to affected customers, the FTC said, and it could affect roughly 35 million Prime users during the period in question.
Refunds are capped at $51 per eligible customer and will be issued in two waves. Automatic payouts will go to customers who signed up for Prime through a challenged enrollment flow — such as the Universal Prime page, the shipping option select page, Prime Video, or Amazon's single-page checkout — and who used no more than three Prime benefits within any 12-month period. Those eligible for automatic refunds will receive their payment within 90 days of the FTC order.
The settlement also covers customers who tried to cancel Prime during the same period but were unsuccessful and who used no more than 10 Prime benefits in any 12-month period. These individuals will need to submit a claim form after the automatic payouts are completed. Amazon will send notification emails and letters within 30 days after automatic payments end. After a customer submits a claim, Amazon has 30 days to review it and issue refunds. The FTC and Amazon have not yet published the official claims website or the process, but information and links are expected to appear on Amazon's site and app once available. Eligible customers will receive claim forms by email and by mail after the automatic payout period, and they will have up to 180 days from receipt of the claim form to submit it via email, prepaid mail, or the claims website.
The FTC said that Amazon used “sophisticated subscription traps” to entice people into Prime and to obscure cancellation options. FTC Chair Andrew N. Ferguson said the settlement would put “billions of dollars back into Americans’ pockets” and ensure Amazon never repeats the conduct. Amazon said the company and its executives “have always followed the law” and framed the settlement as a way to move forward and focus on innovating for customers. The agency noted this as the FTC's largest-ever settlement and the second-highest refund award in its history.
If you were an Amazon Prime member or tried to cancel between mid-2019 and mid-2025, monitor notices from Amazon and the FTC for eligibility details and updates on the claims process. This action underscores the FTC's ongoing scrutiny of online subscription practices for major platforms.
The settlement’s disclosure and enforcement come amid broader concerns about how digital subscriptions are marketed and managed, and it could influence how e-commerce platforms structure enrollment flows and cancellation pathways going forward.
