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ZDNET's key takeaways
A recent FTC ruling means Amazon must pay $2.5 billion.
Amazon allegedly tricked customers into full Prime subscriptions.
Customers can receive up to $51.
If you're an Amazon Prime subscriber, you might be able to take part in a new class action suit and claim your share of a $2.5 billion settlement.
The FTC announced today that not only did Amazon trick millions of people into signing up for a Prime subscription through deceptive web pages, but it also made the cancellation process unnecessarily difficult. As a result, Amazon now has to pay a $1 billion penalty and provide $1.5 billion in refunds to affected consumers.
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The commission says this is the largest ever civil penalty in a case involving an FTC rule violation.
In addition to the financial penalty, the FTC is also requiring Amazon to do several things, including:
Create a clear and conspicuous button for customers to decline a full Prime subscription. (This means the button can't say "No, I don't want Free Shipping.")
Create disclosures about all Prime terms during the enrollment process, including cost, date, and frequency of charges; information about auto-renewal; and cancellation procedures.
Create a simple way for consumers to cancel Prime using the same method used to sign up. The FTC adds that this process "cannot be difficult, costly, or time-consuming."
Pay for an independent, third-party supervisor to monitor Amazon's compliance with policies.
What Amazon allegedly did wrong
The FTC alleges that some customers who were trying to sign up for a cheaper Amazon Prime Video subscription instead signed up for an automatically renewing, more expensive Prime subscription. Prime Video is a part of an Amazon Prime membership, but you can also sign up for the video service alone for about $6/month less.
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In an emailed statement, Mark Blafkin, an Amazon spokesperson, said, "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," adding that "Amazon and our executives have always followed the law."
How much will customers receive?
Millions of customers who signed up for Prime since 2019 will automatically receive reimbursements of up to $51. Other Amazon users will be able to submit claims once the filing process begins. How much each customer will receive depends on how many Prime perks the customer used; for example, if you took advantage of things like free shipping, you'll receive less.