Amazon has agreed to a $2.5 billion settlement after being accused by the Federal Trade Commission (FTC) of misleading customers into signing up for its Prime membership and making it difficult to cancel subscriptions. According to the FTC, $1.5 billion of the settlement will be refunded to affected customers, while $1 billion will be paid as civil penalties.
Federal officials stated that Amazon used “confusing and deceptive user interfaces” that sometimes resulted in customers enrolling in Prime without their knowledge. The company was also accused of complicating the cancellation process so that consumers would be less likely to end their memberships. During the investigation, documents revealed that Amazon executives and employees were aware of these enrollment and cancellation issues.
An Amazon spokesperson told McClatchy News, “Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers.” Mark Blafkin, another spokesperson, added: “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. We will continue to do so, and look forward to what we’ll deliver for Prime members in the coming years.”
As part of the settlement terms, Amazon is required to notify eligible customers about refunds both electronically and by mail. Customers who enrolled in Amazon Prime but used no more than three benefits within a 12-month period may receive an automatic payout of up to $51 without submitting a claim form. Others who believe they were unintentionally enrolled or unable to cancel between June 23, 2019, and June 23, 2025 can submit a claim within 180 days from receiving a claim form; they could also receive up to $51.
Amazon must also create a website with details on eligibility criteria and instructions for submitting claims. For the first 30 days of the settlement program, links directing users to this site are required on Amazon’s platforms. As of September 25th, however, no such link had appeared on Amazon’s website.
McClatchy News contacted Amazon on September 25 regarding when this information would become available online but did not receive an answer.
