Amazon has agreed to pay $2.5 billion to resolve a lawsuit brought by the Federal Trade Commission, which accused the company of deceiving customers into subscribing to Prime and creating obstacles for those who tried to cancel. The settlement, announced today, is the largest of its kind in FTC history.
The tech giant will hand over $1 billion in civil penalties, the biggest fine ever imposed for a violation of an FTC rule, along with $1.5 billion in refunds to customers who were affected. Despite the massive payout, Amazon did not admit fault in the agreement.
Prime, Amazon’s flagship subscription service that provides members with benefits like faster delivery and special savings at Whole Foods, now has a global membership of more than 200 million people.
According to the FTC, the refunds are expected to help roughly 35 million consumers who were charged for Prime memberships they did not want or were unable to cancel easily.
Those eligible for restitution include customers who may have signed up through Amazon’s “Single Page Checkout” between June 23, 2019, and June 23, 2025.
The lawsuit was first filed two years ago in federal court. The FTC argued that Amazon violated the Restore Online Shoppers’ Confidence Act, a 2010 statute aimed at protecting consumers from deceptive online practices.
The agency said Amazon purposely made it difficult for customers to shop without enrolling in Prime.
In its complaint, the FTC further alleged that canceling Prime was intentionally complicated, with company executives often blocking or delaying efforts to simplify the process.
“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,” FTC Chairman Andrew N. Ferguson declared. “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.”
In response, an Amazon representative told Newsweek that the company continues to believe it acted within the law but chose to settle to avoid a drawn-out legal battle. The spokesperson said Amazon remains focused on compliance and customer service.
Amazon also issued a statement to Newsweek, saying: “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.”
FTC Chairman Andrew N. Ferguson added: “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again. The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”
In a legal brief filed last month, Amazon argued: “Occasional customer frustrations and mistakes are inevitable — especially for a program as popular as Amazon Prime.”
As part of the settlement, Amazon must adjust how customers sign up for and cancel Prime. New requirements include a “clear and conspicuous button” to decline Prime, a cancellation process that matches the ease of enrollment, and full disclosure of all terms during the sign-up process.
