Amazon will pay $2.5 billion to settle the FTC’s Prime lawsuit

Amazon has agreed to pay $2.5 billion to settle a lawsuit from the Federal Trade Commission, which claimed it tricked millions of customers into subscribing to Prime and made it hard to cancel.

Under the agreement, Amazon will pay a $1 billion civil penalty, along with $1.5 billion that it will pay back to an estimated 35 million customers impacted by the company’s “deceptive” sign-up process. Amazon must also stop its “unlawful enrollment and cancellation practices” for Prime.

A jury was originally set to decide the outcome of a lawsuit during a trial that began in Seattle this week, but now that’s been cut short by the settlement. The FTC filed its lawsuit against Amazon in 2023, accusing it of using “dark patterns” to deceive people into signing up for Prime. It also alleged Amazon executives were aware of these practices, and also made it “exceedingly difficult” for customers to cancel their Prime memberships by having them go through unnecessary steps.

Now, the FTC will require Amazon to change its Prime signup process by having a “clear and conspicuous button” for customers to decline a Prime subscription. That means Amazon can no longer show customers a button that says, “No, I don’t want Free Shipping” to decline a Prime subscription.

Additionally, Amazon must make it easier for Prime members to cancel their subscription, using the same steps they took to sign up. “The process cannot be difficult, costly, or time-consuming,” The FTC says. The ecommerce giant is also required to clearly describe Prime’s terms and conditions during the enrollment process, including its cost, auto-renewal policies, and cancellation procedures.

”Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers,” Amazon says in a statement posted to its website. “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 resolves one of the FTC’s legal cases against Amazon, as the agency has also filed an antitrust lawsuit against the company for allegedly punishing sellers who sell products for a lower price outside of its online marketplace. Amazon is expected to go to trial over this lawsuit in 2027.

“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 in a statement.

Update, September 25th: Added a statement from Amazon.