SEATTLE (BN24) — Amazon has agreed to pay $2.5 billion to settle claims from the U.S. Federal Trade Commission that the tech giant deceived millions of customers into signing up for its Prime membership and created barriers that made canceling the service unnecessarily difficult.
The settlement, announced as a federal jury trial was already underway in Seattle, includes $1.5 billion in customer refunds and represents the largest civil penalty ever secured by the FTC. The agency alleged that Amazon used manipulative online interfaces—commonly referred to as “dark patterns” to push consumers toward unwanted Prime subscriptions during checkout, often without clearly presenting terms or offering a transparent option to decline.
FTC Chairman Andrew Ferguson called the decision a significant step in holding tech firms accountable. “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,” Ferguson said. “Today, we are putting billions of dollars back into Americans’ pockets and making sure Amazon never does this again.”
Amazon, which did not admit wrongdoing as part of the agreement, has not yet publicly responded to the settlement. Under the terms, the company will be required to end practices that mislead users into thinking they are declining a service, such as presenting buttons labeled “No, I don’t want free shipping” when they are actually consenting to a Prime trial.
Prime, which offers benefits including free shipping and access to streaming content, currently costs $139 per year or $14.99 monthly in the U.S. and £95 annually in the U.K. According to the FTC, misleading tactics led millions to enroll in the service without informed consent. Consumers who used Prime benefits fewer than three times within a year will be automatically refunded. Those who used it fewer than ten times may still be eligible for a refund by filing a claim.
An estimated 35 million U.S. consumers affected between June 2019 and June 2025 may qualify for refunds of up to $51, based on FTC estimates.
Internal Amazon communications cited in the case revealed that company executives and staff were aware of the questionable nature of their subscription practices, with one document quoting an employee referring to “subscription driving” as “a bit of a shady world.”
The case, originally brought under the Biden administration during FTC Chair Lina Khan’s tenure, was seen as part of a broader push to regulate Big Tech. Ferguson, appointed earlier this year by President Donald Trump, has also taken a firm stance on tech industry practices.
As part of the agreement, Amazon will implement new systems to simplify the Prime cancellation process, removing misleading language and requiring clearer disclosures in its checkout design.
The settlement underscores the FTC’s increasing scrutiny of subscription-based services and highlights the legal risks facing major technology companies accused of undermining consumer rights through manipulative design.
