Amazon has agreed to pay $2.5 billion (£1.9bn) in the United States to settle claims that it misled millions of customers into enrolling in its Prime service and made it difficult for them to cancel.
Under the proposed settlement announced by the Federal Trade Commission, $1.5 billion of the total will be refunded to customers who were unwittingly signed up for the subscription.
The deal comes just days after the trial began before a jury in Seattle and marks the largest civil penalty ever secured by the FTC.
Amazon, which neither admitted nor denied the allegations, said it had “always followed the law” and that the settlement would allow the company to “move forward.”
Prime, which offers free shipping, access to streaming movies, and other benefits, is used by hundreds of millions worldwide.
The service costs $139 a year or $14.99 per month in the U.S., and £95 a year in the United Kingdom.
The FTC targeted several Amazon practices, including pop-ups during checkout that repeatedly encouraged users to sign up for Prime, collecting billing information without clearly disclosing terms, and offering one-month trials that automatically enrolled customers without proper notice. The agency argued these practices violated consumer protection laws.
“The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription,” FTC Chairman Andrew Ferguson said. “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
An estimated 35 million U.S. customers affected by these practices between June 2019 and June 2025 could be eligible for refunds, with amounts up to $51.
Customers who used Prime benefits fewer than three times in a year will receive automatic refunds, while those who used it fewer than 10 times must file a claim.
As part of the settlement, Amazon will remove buttons saying “No, I don’t want free shipping” and must implement an easy process for canceling Prime subscriptions.
The FTC also highlighted internal Amazon documents showing that executives and employees were aware the company’s practices might be questioned, noting comments such as “subscription driving is a bit of a shady world.”
Amazon spokesperson Mark Blafkin said the company has worked “incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership.”
He added, “Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers.”
Amazon had already made some adjustments while defending itself against the lawsuit, which the FTC filed in 2023 during President Joe Biden’s administration.
At the time, the agency was led by Lina Khan, who became known for advocating stricter anti-monopoly scrutiny of companies like Amazon. Ferguson, appointed earlier this year by former President Donald Trump, has also taken a firm stance on tech firms.
However, critics argue the FTC’s settlement does not go far enough. Some called for the reimplementation of a rule requiring easy cancellation of subscriptions, which was enacted under the Biden administration but struck down by an appeals court earlier this year.
“Enough with this game of whack-a-mole,” said Nidhi Hegde, executive director of the American Economic Liberties Project, a group advocating for stricter oversight of large corporations. “If the Commission is serious about protecting people from deceptive subscription schemes, it should re-issue the Click-to-Cancel rule today.”
