Amazon has agreed to pay $2.5 billion to settle a lawsuit filed by the Federal Trade Commission, which alleged that the company has “knowingly duped” millions of people into enrolling in its Amazon Prime membership program by using what the FTC has described as “dark patterns,” or, "manipulative, coercive, or deceptive user-interface designs.”
The settlement claimed that Amazon “obtains consumers’ billing information before it discloses all material terms for an Amazon Prime subscription,” and in doing so, was in violation of the Restore Online Shoppers' Confidence Act, which was signed into law in 2010 to prevent the use of deception to prompt or encourage online purchases.
The $2.5 billion payment includes $1 billion that has to be paid to the FTC, and $1.5 billion that will go directly to consumers who unknowingly signed up for Prime, or tried and failed to cancel their Prime subscriptions due to Amazon’s online interface, between June 23, 2019 and June 23, 2025. Individual consumers can get compensated up to $51 each.
In a statement released by the FTC on Tuesday, agency chairman Andrew Ferguson said that the settlement “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.”
“Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again,” Ferguson said.
Amazon spokesperson Alisa Carroll tells WIRED that there was “no admission of guilt in this settlement by the company or any executives."
Dark patterns are hardly exclusive to Amazon. The privacy settings of countless websites make it confusing to reject data-sharing and the use of cookies. Many fashion sites claim that an item of interest is dangerously low in stock, even though it’s unclear how true that is. Google has been accused of employing “dark patterns” by making it difficult to tell which search results are organic and which are paid for. Wednesday’s $2.5 billion settlement with Amazon marks a major attempt at paying consumers back for purchases that they made under these conditions.
It’s unclear exactly how many Americans have Amazon Prime, but in 2021 company founder Jeff Bezos said it had more than 200 million subscribers globally. Carroll, the Amazon spokesperson, tells WIRED that it settled so as not to risk "months or years of appeals."
“The settlement largely requires us to maintain the sign-up and cancellation process that has been in place for several years—not to make additional changes,” Carroll says. “We will of course continue to comply with the law.”
The terms of the settlement were laid out in a proposed stipulated order signed by the District Court judge on Wednesday.
According to the terms of the settlement, within 30 days Amazon has to deposit $1.5 billion into a fund that will be used to pay back eligible consumers. The company also has to make two $500 million payments to the FTC; the first has to be paid within 14 days, and the second has to be paid within 18 months.