The FTC has just announced a $2.5 billion settlement with Amazon over what it called “misleading” practices related to Prime subscriptions. Here are the details.
Amazon Prime settlement estimated to benefit 35 million affected consumers
The US Federal Trade Commission (FTC) announced back in 2023 that it was investigating Amazon over “enrolling consumers in Amazon Prime without consent and sabotaging their attempts to cancel.”
Two years later, the FTC and Amazon have just reached a “historic” $2.5 billion settlement as a penalty for Amazon “knowingly misleading” millions of consumers.
From the press release:
The historic monetary judgment contained in the settlement is only the third ROSCA case in which the FTC has obtained a civil penalty. It includes: a $1 billion civil penalty, which is the largest ever in a case involving an FTC rule violation;
civil penalty, which is the largest ever in a case involving an FTC rule violation; $1.5 billion in consumer redress, providing full relief for the estimated 35 million consumers impacted by unwanted Prime enrollment or deferred cancellation. This is the second-highest restitution award ever obtained by FTC action.
Per the FTC, Amazon “created confusing and deceptive user interfaces to lead consumers to enroll in Prime without their knowledge.” The company also “created a complex and difficult process for consumers seeking to cancel their Prime subscription.”
These allegations were reportedly backed up by internal Amazon communications:
Amazon documents discovered in the lead up to trial showed that Amazon executives and employees knowingly discussed these unlawful enrollment and cancellation issues, with comments like “subscription driving is a bit of a shady world” and leading consumers to unwanted subscriptions is “an unspoken cancer.”
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