Amazon has reached a $2.5 billion settlement with the U.S. Federal Trade Commission (FTC) to resolve allegations that it misled customers into Prime subscriptions and made cancellations difficult. Under terms of the deal, Amazon will pay $1 billion in civil penalties and provide $1.5 billion in refunds to affected consumers.
The FTC accused Amazon of using confusing enrollment prompts, obscure free-trial disclosures, and a cumbersome cancellation process—especially for users who signed up and then used fewer than three Prime benefits. Under the settlement, customers who registered between June 23, 2019, and June 23, 2025, through allegedly deceptive methods and used minimal services will automatically receive $51 in refunds. Others may file claims for compensation.
Amazon did not admit wrongdoing and characterized the settlement as a step forward to avoid continued litigation. As part of the agreement, the company must simplify its enrollment and cancellation processes, prominently display a clear “decline Prime” option, and ensure renewal and terms are disclosed clearly. An independent third-party monitor will oversee compliance.
The case had just entered trial in Seattle when the settlement was announced. The FTC criticised Amazon for internal practices that allegedly prioritized subscription growth over consumer clarity.
This settlement ranks among the largest ever imposed by the FTC in recent years, especially in cases involving violations of online consumer rules. Investors responded with muted reaction; Amazon’s stock showed minimal movement following the announcement.
For consumers, the payout and reform measures may signal a shift toward greater transparency in how subscription services are marketed and cancelled. The FTC views this settlement as a landmark win in its efforts to restrain deceptive digital practices.