Amazon Prime Settlement: A Landmark FTC Win Against Deceptive Practices

Amazon settles with the FTC for $2.5 billion without admitting wrongdoing, addressing allegations of deceptive Prime subscription practices. The settlement compensates eligible customers and mandates clearer cancellation options, with Amazon agreeing to oversee compliance with a third-party supervisor.

In a significant settlement, Amazon will pay $2.5 billion to wrap up allegations from the Federal Trade Commission (FTC) that the company used deceptive tactics to boost its Prime subscription numbers. Around 35 million Prime members stand to benefit from a $1.5 billion reimbursement fund as part of this monumental agreement.

While Amazon did not admit any wrongdoing, it agreed to a series of reforms. The settlement calls for implementing a 'clear and conspicuous' button for declining Prime subscriptions and easing the cancellation process. A third-party supervisor will also be brought in to ensure compliance with these new regulations.

This resolution emerges a few days into a trial in Seattle, where the FTC argued Amazon's methods ensnared unwilling consumers. It's a strategic win for the FTC's tech oversight ambitions, marking one of the largest restitutions in its history, set against the backdrop of Amazon's $23.9 billion subscription revenue for the first half of 2025.

(With inputs from agencies.)