Amazon will pay $2.5 billion to settle FTC claims it misled people into signing up for Prime memberships and made cancellation hard.
The agreement ends a Seattle jury trial initiated by the FTC, which accused Amazon of using website design choices to steer users into Prime membership while obscuring service terms.
The settlement terms require Amazon to pay the $2.5 billion sum, divided between a $1 billion penalty and a $1.5 billion reimbursement fund. Approximately 35 million Prime users may be eligible for payouts of $51, depending on the number of claims. The agency said it is one of the largest settlements in its history.
Amazon did not admit or deny wrongdoing as part of the deal. “Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers,” company spokesperson Mark Blafkin said in a statement. He added: “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world.”
The settlement requires Amazon to overhaul its enrollment process. The company must add a “clear and conspicuous” button for customers to decline Prime, plainly disclose subscription terms during sign-up, and simplify the cancellation process. An independent supervisor will monitor compliance.
FTC Chair Andrew Ferguson praised the outcome as a victory for consumer rights, calling it “a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.” He said the case underscored how dark patterns — manipulative online design techniques — can distort user choice and erode consumer trust.
The trial had threatened to expose more of Amazon’s internal deliberations. According to filings, employees acknowledged that enrollment tactics sometimes confused shoppers, with one describing “subscription driving” as “a bit of a shady world.” The settlement allows Amazon to resolve the claims without further public scrutiny of its practices.
Prime, Amazon’s subscription program, now includes benefits such as streaming, grocery delivery, exclusive discounts, and fast shipping. Membership costs $14.99 per month or $139 annually.
An estimated 200 million Americans subscribe to Prime, generating over $44 billion in revenue in 2024. Prime members spend more than non-members, making them highly valuable to Amazon.
Analysts said the settlement is unlikely to dent that dominance. “Amazon may have made Prime easier to cancel, but the program remains deeply entrenched in most American households,” said eMarketer analyst Zak Stambor. Investors appeared to agree, as Amazon’s stock barely moved after the FTC’s announcement.
The FTC case signals a broader push to regulate the consumer practices of Big Tech. Regulators intend to more aggressively address “dark patterns” across digital platforms, using the Amazon settlement as a prominent example of this strategy.
