Amazon.com has agreed to pay $2.5 billion to resolve allegations brought by the U.S. Federal Trade Commission (FTC) that it misled millions of customers into enrolling in its Prime subscription service. The settlement, announced Thursday, includes $1.5 billion in reimbursements to Prime subscribers and a $1 billion fine payable to the agency, Reuters reported.
Under the agreement, approximately 35 million Prime members will be eligible for payments of $51 each. Customers who signed up for Prime between June 23, 2019, and June 23, 2025, through certain promotional offers—and subsequently used few Prime benefits—will receive automatic reimbursements. Additional claims may be submitted by consumers who attempted but failed to cancel their membership during the period.
While the payout is significant, analysts note that the financial impact on Amazon is minimal. The company generates roughly $2.5 billion in sales every 33 hours, and its shares were largely unchanged following the announcement.
The FTC alleged that Amazon deliberately designed its sign-up and cancellation processes to confuse consumers, a practice internally described by employees as “an unspoken cancer.” Between 2017 and 2022, the agency said, Amazon executives rejected proposed design changes that would have made subscription terms more transparent. Amazon began modifying its enrollment and cancellation procedures in 2022, during the FTC’s probe, and the agency filed suit the following year.
As part of the settlement, Amazon will implement clearer disclosures of subscription terms, add a “clear and conspicuous” option for consumers to decline enrollment, and simplify cancellation procedures. The company will also fund an independent monitor to oversee compliance. Amazon emphasized that many of these changes are already in place.
“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,” Amazon said in a statement.
The $1.5 billion restitution fund is the second-largest consumer payout in FTC history, underscoring the agency’s growing scrutiny of large technology companies. FTC Chair Andrew Ferguson hailed the resolution as “a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.”
Former FTC Chair Lina Khan, who initiated the case, described the settlement as “a drop in the bucket for Amazon” but stressed it exposed harmful practices at the company’s highest levels.
The case comes amid broader regulatory efforts to curb what officials view as manipulative subscription tactics across the technology sector. The FTC’s investigation into Amazon began during the Trump administration and continued under the Biden administration.
Despite the settlement, analysts believe Amazon’s Prime program—launched in 2005 and now priced at $139 annually—will remain central to the company’s business model. Prime generated $23.9
