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By Alia Shoaib
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Amazon has agreed to pay a record $2.5 billion to settle a Federal Trade Commission lawsuit that had alleged the company misled customers into enrolling in its Prime membership program and made it difficult to cancel.
Of this sum, Amazon will pay $1 billion in civil penalties to the government and $1.5 billion in payments to affected consumers.
Newsweek contacted Amazon via email on Friday.
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Why It Matters
The FTC said the settlement will help provide relief for what it said was an estimated 35 million consumers impacted by unwanted Prime enrollment or deferred cancellation.
The settlement also sets a precedent for companies to be required to be transparent about how consumers sign up for and cancel subscriptions.
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What To Know
Amazon will issue refunds to eligible Prime subscribers in two waves following the settlement.
Refunds are available to subscribers who signed up for Prime between June 23, 2019, and June 23, 2025, with the refund amount capped at $51.
Eligible customers are those who either signed up for Prime through a “challenged enrollment flow”—a process generally regarded as making it difficult to cancel subscriptions—or unsuccessfully tried to cancel their membership, either by failing to complete the online cancellation process or by inadvertently accepting an offer during cancellation.
The “challenged enrollment flow” refers to Amazon signup processes such as the Universal Prime Decision Page, the Shipping Option Select Page, the Prime Video enrollment flow, and the Single Page Checkout.
The first group of refunds will be automatic. This applies to subscribers who enrolled through a “challenged enrollment flow” and have used no more than three Prime benefits within 12 months.
No action is required, and Amazon will issue the payments within 90 days.
A second group of customers must apply for refunds through a claims process.
This applies to customers who signed up for Prime through a “challenged enrollment flow” or unsuccessfully attempted to cancel their membership, and used up to 10 Prime Benefits during any 12-month period.
Amazon will send claims forms to eligible customers within 30 days of completing the automatic refunds.
Customers will then have 180 days to submit the claim after receiving the form, and Amazon will have 30 days to process them.
What People Are Saying
Federal Trade Commission Chairman Andrew N. Ferguson said in a statement on Thursday: “Today, the Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.”
“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.”
Amazon said in a statement: "Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers.”
“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. We will continue to do so, and look forward to what we’ll deliver for Prime members in the coming years."
What Happens Next
The first group of customers will receive automatic payments within 90 days, after which Amazon will begin sending other eligible customers claims forms.
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