Amazon will pay out $2.5 billion for ‘misleading’ Prime subscribers

The FTC has just announced a $2.5 billion settlement with Amazon over what it called “misleading” practices related to Prime subscriptions. Here are the details.

Amazon Prime settlement estimated to benefit 35 million affected consumers

The US Federal Trade Commission (FTC) announced back in 2023 that it was investigating Amazon over “enrolling consumers in Amazon Prime without consent and sabotaging their attempts to cancel.”

Two years later, the FTC and Amazon have just reached a “historic” $2.5 billion settlement as a penalty for Amazon “knowingly misleading” millions of consumers.

From the press release:

The historic monetary judgment contained in the settlement is only the third ROSCA case in which the FTC has obtained a civil penalty. It includes:

• a $1 billion civil penalty, which is the largest ever in a case involving an FTC rule violation;
• $1.5 billion in consumer redress, providing full relief for the estimated 35 million consumers impacted by unwanted Prime enrollment or deferred cancellation. This is the second-highest restitution award ever obtained by FTC action.

Per the FTC, Amazon “created confusing and deceptive user interfaces to lead consumers to enroll in Prime without their knowledge.” The company also “created a complex and difficult process for consumers seeking to cancel their Prime subscription.”

These allegations were reportedly backed up by internal Amazon communications:

Amazon documents discovered in the lead up to trial showed that Amazon executives and employees knowingly discussed these unlawful enrollment and cancellation issues, with comments like “subscription driving is a bit of a shady world” and leading consumers to unwanted subscriptions is “an unspoken cancer.” 

So far, there are no details on how affected users can file to get a piece of the $1.5 billion consumer redress. But that information should be forthcoming from Amazon in the near future.

Update: Amazon spokesperson Mark Blafkin shared the following statement with 9to5Mac:

“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.”

Did you get enrolled in Amazon Prime against your knowledge, or have a hard time canceling? Let us know in the comments.

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