E-commerce Giant to Reimburse Customers and Face Fines in “Deceptive” Enrollment Case
Amazon.com has agreed to pay a total of $2.5 billion in fines and reimbursements to Prime subscribers to settle allegations from the Federal Trade Commission (FTC) that it used deceptive practices to generate subscriptions. The settlement, announced on Thursday, marks a significant win for consumers and the FTC’s efforts to scrutinize big tech companies.
Under the terms of the agreement, approximately 35 million Prime customers will be eligible for payouts from a $1.5 billion fund, with an additional $1 billion going to the FTC in fines. While a substantial sum, the financial impact on Amazon is relatively minor, as the company generates roughly $2.5 billion in sales every 33 hours. Amazon did not admit wrongdoing as part of the settlement, and its shares remained largely unchanged following the news.
Customers who enrolled in Prime between June 23, 2019, and June 23, 2025, through specific offers and subsequently made minimal use of Prime benefits, will automatically receive $51. Furthermore, the settlement allows customers to submit claims for payment if they attempted to cancel their Prime membership during that period but were unsuccessful.
In a statement, Amazon affirmed that the settlement allows it to move forward and focus on its customers. The company stated, “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.”
As part of the settlement, Amazon has committed to implementing several changes to its subscription practices. This includes creating a “clear and conspicuous” button for customers to decline a Prime subscription, simplifying the cancellation process, and more clearly disclosing subscription terms during enrollment. An independent supervisor will also monitor Amazon’s compliance with these new agreements. Amazon noted that the settlement largely requires it to maintain changes that were already in place rather than introduce entirely new ones.
The FTC’s case alleged that Amazon executives, between 2017 and 2022, had rejected changes that would have made sign-up and cancellation processes more transparent. The company eventually adopted these changes in 2022 while under FTC investigation, with the agency formally suing Amazon the following year.
FTC Chair Andrew Ferguson hailed the deal as “a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.” The settlement, which is the second-largest restitution amount ever for an FTC action, allows Amazon to avoid further public scrutiny of the FTC’s claims that executives were aware of customer confusion regarding sign-up and cancellation methods. Internal communications cited by the FTC included comments like “subscription driving is a bit of a shady world” and leading consumers to unwanted subscriptions is “an unspoken cancer.”
Despite the hefty settlement, analysts believe it is unlikely to significantly dent Prime’s market dominance. Launched in 2005 for $79 per year, Prime’s annual fee has steadily increased to $139 in 2022, generating $23.9 billion in subscription revenue in the first half of 2025, solidifying its position as a key growth driver for Amazon.
