Amazon $2.5B FTC Settlement Over Prime Enrollment

Amazon agreed to a $2.5 billion settlement with the US Federal Trade Commission to resolve allegations it used manipulative “dark patterns” to enroll customers in Prime and made cancellation difficult, comprising a $1 billion civil penalty and $1.5 billion in consumer refunds. About 35 million Prime customers are eligible; enrollees from June 23, 2019 to June 23, 2025 will receive automatic refunds (roughly $51 each for some claimants) while others can submit claims. The settlement, reached days into a Seattle trial, requires Amazon to stop unlawful enrollment and cancellation practices, add a clear “decline Prime” button, improve subscription disclosures, and submit to independent monitoring. Amazon did not admit wrongdoing and said the deal allows it to move forward, while the FTC hailed the outcome as a historic win citing internal documents about “subscription driving” and a complex cancellation flow nicknamed “Iliad.” Analysts said the payout is a small portion of Prime revenue and market reaction was muted, and officials described the agreement as among the largest FTC penalties and restitution awards for subscription-rule violations.