Prime cut: Amazon settles $2.5B federal trade case

Published: Thursday, September 25, 2025 at 8:20 pm

Amazon Settles FTC Lawsuit for $2.5 Billion Over Prime Enrollment Practices

Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC) over allegations of deceptive practices related to its Prime subscription service. The settlement, announced Thursday, resolves a case that centered on claims that Amazon misled customers into signing up for Prime memberships and made it difficult for them to cancel.

The agreement includes a $1 billion civil penalty, the largest fine in the FTC's history, and $1.5 billion in consumer refunds. The FTC stated that the refunds will be distributed to customers who were unintentionally enrolled in Prime or faced obstacles when attempting to cancel their subscriptions.

The lawsuit, filed two years ago, alleged violations of the Restore Online Shoppers Confidence Act, a 2010 law designed to protect consumers in online transactions. The FTC claimed that Amazon's practices, including unclear enrollment processes and a complex cancellation procedure, violated this law. The FTC said Amazon deliberately made it difficult for customers to purchase an item without also subscribing to Prime. In some cases, consumers were presented with a button to complete their transactions which did not clearly state it would also enroll them in Prime, the agency said.

Amazon, while not admitting any wrongdoing, stated that it chose to settle the case to avoid a lengthy legal battle. The company maintains that it has always followed the law and is committed to providing clear and simple options for customers to manage their Prime memberships.

Eligible customers who may have been affected by the practices between June 23, 2019, and June 23, 2025, are eligible for automatic refunds of up to $51. Amazon is also required to establish a claims process for over 30 million customers impacted by the issues.

Prime, which offers benefits like faster shipping, streaming services, and discounts, is a significant revenue stream for Amazon, with over 200 million members worldwide. In its latest financial report, the company reported over $12 billion in net revenue for subscription services, a 12% increase from the same period last year.

BNN's Perspective:

This settlement highlights the importance of transparency and consumer protection in the digital marketplace. While Amazon's Prime service offers significant value to its members, the FTC's actions underscore the need for companies to ensure that their subscription processes are clear, fair, and easy for consumers to navigate. This settlement serves as a reminder to all businesses to prioritize consumer rights and avoid practices that could be perceived as deceptive or manipulative.

Keywords: Amazon, FTC, Prime, settlement, consumer refunds, subscription, deceptive practices, cancellation, civil penalty, online retail, Restore Online Shoppers Confidence Act, consumer protection

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