Amazon reaches ‘historic’ $2.5B Prime settlement
The company allegedly tricked customers into signing up for Prime membership that was then difficult to cancel
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 Thursday. 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.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
-
Political cartoons for January 31Cartoons Saturday's political cartoons include congressional spin, Obamacare subsidies, and more
-
Syria’s Kurds: abandoned by their US allyTalking Point Ahmed al-Sharaa’s lightning offensive against Syrian Kurdistan belies his promise to respect the country’s ethnic minorities
-
The ‘mad king’: has Trump finally lost it?Talking Point Rambling speeches, wind turbine obsession, and an ‘unhinged’ letter to Norway’s prime minister have caused concern whether the rest of his term is ‘sustainable’
-
Trump sues IRS for $10B over tax record leaksSpeed Read The president is claiming ‘reputational and financial harm’ from leaks of his tax information between 2018 and 2020
-
Trump, Senate Democrats reach DHS funding dealSpeed Read The deal will fund most of the government through September and the Department of Homeland Security for two weeks
-
Fed holds rates steady, bucking Trump pressureSpeed Read The Federal Reserve voted to keep its benchmark interest rate unchanged
-
Judge slams ICE violations amid growing backlashSpeed Read ‘ICE is not a law unto itself,’ said a federal judge after the agency violated at least 96 court orders
-
Rep. Ilhan Omar attacked with unknown liquidSpeed Read This ‘small agitator isn’t going to intimidate me from doing my work’
-
Democrats pledge Noem impeachment if not firedSpeed Read Trump is publicly defending the Homeland Security secretary
-
Hegseth moves to demote Sen. Kelly over videospeed read Retired Navy fighter pilot Mark Kelly appeared in a video reminding military service members that they can ‘refuse illegal orders’
-
Trump says US ‘in charge’ of Venezuela after Maduro grabSpeed Read The American president claims the US will ‘run’ Venezuela for an unspecified amount of time, contradicting a statement from Secretary of State Marco Rubio
