TODAY’S BUSINESS story

Amazon reaches ‘historic’ $2.5B Prime settlement

What happened
Amazon has settled a lawsuit over allegations it tricked customers into signing up for Prime membership and made it too onerous to end their subscriptions, the Federal Trade Commission announced yesterday. Amazon agreed to pay a $1 billion civil penalty and up to $1.5 billion in refunds to an estimated 35 million affected customers.

Who said what
Amazon relied on “sophisticated subscription traps designed to manipulate consumers into enrolling in Prime,” then “made it exceedingly hard” to cancel, FTC Chair Andrew Ferguson said. An Amazon spokesperson said the e-commerce giant had “always followed the law” and could now “move forward and focus on innovating for customers.” The company did not admit or deny wrongdoing in the settlement.

The “historic” settlement, one of the largest in U.S. history, was a “surprise,” coming days after the case went to trial in federal court in Seattle, The Associated Press said. The fine “rivals some of the large penalties” levied by the European Union’s aggressive privacy and competition regulators, The Washington Post said, but it’s also just a “fraction” of Amazon’s “nearly $60 billion” in profits last year. This is a “drop in the bucket for Amazon,” former FTC Chair Lina Khan, who filed the case in 2023, said on social media. “And, no doubt, a big relief for the executives who knowingly harmed their customers.”

What next?
Amazon has 90 days to automatically refund $51 to customers who signed up between June 2019 and June 2025 through a deceptive sign-up process, then barely used the service or watched Prime Video. Other customers who could qualify will be contacted with directions to apply for refunds.

TODAY’S Global Trade Story

Trump declares new tariffs on drugs, trucks, furniture

What happened
President Donald Trump last night said he would impose new tariffs on drugs, heavy trucks and furniture starting next Wednesday. Drugmakers who have broken ground on new U.S. manufacturing plants by then would be exempt from the new 100% import tax, he said.

Who said what
Trump said he was using his authority under Section 232 of the 1962 Trade Expansion Act to slap tariffs of 25% on semi trucks, 30% on upholstered furniture, 50% on kitchen and bathroom cabinetry and 100% on some “branded or patented” drugs. The increasing use of Section 232 is “seen as part of the Trump administration’s shift to better-established legal authorities for its tariff actions,” Reuters said. Trump’s “sweeping global tariffs,” issued under different emergency powers, face an uncertain future before the Supreme Court.

The new import taxes add “another dose of uncertainty for the U.S. economy with a solid stock market but a weakening outlook for jobs and elevated inflation,” The Associated Press said. Homebuilders and homeowners will face higher prices from the cabinetry tax, and “the prospect of prices doubling for some medicines could send shock waves to voters.” Higher tariffs on commercial trucks “could put pressure on transportation costs,” hitting a broad range of consumer goods, Reuters said.

What next?
Many drugs may be subject to lower tariffs due to trade deals or because they are generics, but Trump “made his announcements on social media, and much remains unclear about them,” The New York Times said. Further new tariffs could be coming, after the Trump administration this week opened Section 232 investigations into imported robotics, industrial machinery and medical devices.

It’s not all bad

While studying engineering at Johns Hopkins University, Lauren Choi wanted to come up with a way to turn red party cups, which are difficult to recycle due to their plastic blend, into fabric. Five years later she found a way, using an extruder machine to transform shredded plastic cups into thread that is then put into a 3D knitting machine. Her textile company, New Norm, makes clothing only when an order comes in, keeping waste in check.

Under the radar

Is AI playing God with prayer apps?

With forecasts that artificial intelligence will steal our jobs and take over the world, you could be forgiven for thinking that AI is playing God — and on some new apps, that’s exactly what it’s doing. A “slew” of religious apps are encouraging “untold millions” to “confess to AI chatbots,” said Futurism, and some of the digital services “claim to be channelling God himself.”

Apple’s App Store is filled with religious apps. One of them, called Bible Chat, claims to be the No. 1 faith app in the world, with more than 25 million users. “Hallow, a Catholic app, beat Netflix, Instagram and TikTok for the No. 1 spot in the store at one point last year,” said The New York Times.

Bible Chat’s website insists that its AI was “trained exclusively on scripture and developed with guidance from Christian pastors and theologians.” But smaller outfits have trained chatbots to go a step further and specifically “respond as if they were a god,” which some people feel is “sacrilegious,” the Times said. In the U.S., about 40 million people have left churches in the past few decades, so these apps may “lower the barrier to re-enter spiritual life.” In Britain, “there’s a whole generation of people who have never been to a church or synagogue,” said Rabbi Jonathan Romain from Maidenhead Synagogue, so spiritual apps can be “their way into faith.”

These chatbots are “generally ‘yes men,’” said Ryan Beck, chief technology officer at Pray.com, but that’s not a problem. “Who doesn’t need a little affirmation in their life?”

On this day

September 26, 1960

The first televised presidential debate took place between John F. Kennedy and Richard Nixon. Kennedy was widely considered to have won the debate, and went on to win the 1960 election by a razor-thin margin. Since then, televised debates have become a staple of the campaign season.

TODAY’S newspaperS

‘Trump presses for payback’

“Ex-FBI head Comey indicted as Trump presses for payback,” The Wall Street Journal says on Friday’s front page. “Hegseth orders a muster of top brass” as “mystery meeting” for “general and admirals sows alarm, confusion,” The Washington Post says. “Dallas ICE shooting gunman acted alone,” The Dallas Morning News says. “Shooter’s notes show hostility to ICE agents,” The New York Times says. “Mass firings planned if government shuts down,” the Arizona Republic says. “Scars still linger a year after Hurricane Helene,” says The Atlanta Journal-Constitution. “No blame cited in late Eaton fire evacuation alerts,” the Los Angeles Times says. “‘Digital missionaries’ get Vatican’s blessing,” says USA Today.

► See the newspaper front pages

Tall tale

Wipe or subscribe

Some public bathrooms in China are requiring users to watch a video advertisement before gaining access to toilet paper. A social media post shared by China Insider shows a person scanning a QR code and viewing an ad before a few squares of tissue come out. To get more toilet paper, you have to watch another video or pay .07 cents. Supporters say this cuts down on waste, while critics call it dystopian.

Morning Report was written and edited by Nadia Croes, Catherine Garcia, Scott Hocker, Anya Jaremko-Greenwold, Justin Klawans, Chas Newkey-Burdern, Rafi Schwartz, Peter Weber and Kari Wilkin, with illustrations by Stephen Kelly and Julia Wytrazek.