Amazon Agrees To Pay $2.5 Billion In FTC Settlement Of Claims Of Unauthorized Enrollment In Prime Memberships

Amazon has agreed to pay $2.5 billion to settle claims that it enrolled millions in Prime membership subscriptions without their consent and also made it hard for customers to cancel, the Federal Trade Commission announced on Thursday.

The settlement includes a $1 billion civil penalty, and a $1.5 billion fund to give refunds back to consumers.

Amazon Prime subscribers get access to Prime Video, the tech giant’s subscription streaming service.

The FTC said that the $1 billion civil penalty is the largest ever in a case involving an agency rule violation. The $1.5 billion fund, impacting about 35 million consumers, is the second largest restitution amount the agency has obtained, per the FTC.

The FTC filed a complaint against Amazon in 2023, during the Biden administration. A jury trial had started this week in the state of Washington. U.S. District Judge John H. Chun signed off on the settlement Thursday.

Andrew Ferguson, the chairman of the FTC, said in a statement, “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. Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”

An Amazon spokesperson did not immediately respond to a request for comment.

The settlement also requires “a clear and conspicuous button for customers to decline Prime,” and Amazon can no longer have a button that says, “No, I don’t want free shipping.” It also requires clear disclosures about Prime, including auto-renew, the cost and frequency of the charges. A third party supervisor will monitor compliance.