Amazon's $2.5 Billion Settlement: A Landmark FTC Case

Amazon.com will pay $2.5 billion to settle FTC allegations of unauthorized Prime subscriptions. The settlement includes a $1.5 billion fund for affected subscribers and requires clearer user options. This case highlights Amazon's practices and marks significant FTC action against the tech giant.

Amazon.com Inc. has agreed to pay $2.5 billion to settle allegations made by the Federal Trade Commission (FTC) that it enrolled users into Amazon Prime without their consent. A substantial $1.5 billion from the settlement will compensate eligible Prime subscribers, although Amazon has not admitted any wrongdoing.

The settlement compels Amazon to implement a more transparent subscription process by adding a clear button for users to decline Prime subscriptions and simplifying the cancellation procedure. Furthermore, Amazon will fund an independent supervisor to oversee compliance with these new measures.

Documents presented during the Seattle trial revealed internal Amazon discussions acknowledging questionable enrollment practices. FTC Chairman Andrew Ferguson condemned the company's tactics as 'subscription traps' that manipulated consumers. This case marks the second-largest restitution in FTC history, reinforcing the agency's scrutiny of major tech companies.

(With inputs from agencies.)