Amazon has agreed to pay $2.5 billion to settle accusations it tricked millions of customers into subscribing to Prime and made it tough for them to cancel.
Under the settlement — one of the largest to come out of a Federal Trade Commission case — Amazon will pay up to $51 each to eligible customers.
In the lawsuit, first filed by the FTC in 2023, the agency accused Amazon of duping people into automatically renewing their Amazon Prime subscriptions through “manipulative, coercive, or deceptive user-interface designs.” Amazon also made it complicated for people to end their membership, the lawsuit said.
A trial over the lawsuit, filed under the Biden administration, kicked off in Seattle this week. The settlement, announced on Thursday, is the latest example of how the federal government has been trying to rein in the power wielded by Big Tech.
“Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again,” said FTC Chairman Andrew Ferguson in a statement. “The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”
Amazon didn’t admit guilt by agreeing to the settlement.
Mark Blafkin, an Amazon spokesperson, said the company and its executives “have always followed the law and this settlement allows us to move forward and focus on innovating for customers.”
“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,” he said in a statement.
As part of the settlement, Amazon agreed to pay a $1-billion civil penalty and $1.5 billion to provide relief to roughly 35 million customers who were enrolled in Prime without their consent or had trouble canceling their subscriptions, according to a news release from the FTC.
Amazon would also have to make design changes, under the settlement, including clearly providing a button to decline Prime instead of having customers click “No, I don’t want Free Shipping.”
Consumers would also have a way to quickly cancel their Prime membership without it being “difficult, costly, or time-consuming.”
Amazon now will have to create a website that provides consumers with information about the settlement, their rights and instructions for submitting a claim to obtain money.
The company is also required to send a claim form to all eligible customers who were enrolled in Prime without their consent or failed to cancel their subscription between June 23, 2019, and June 23, 2025.
In some cases, customers don’t need to submit a claim. Under the settlement, Amazon would automatically pay eligible customers up to $51 if they had subscribed to Amazon Prime through a “challenged enrollment flow” and had used no more than three Prime benefits in 12 months.
A “challenged enrollment flow” includes subscribing through any Prime decision page, the shipping option select page, Prime video enrollment or the single-page checkout, the order said.
Tech companies have been trying to strengthen their relationship with President Trump, but his administration has also criticized tech giants such as Amazon.
In April, White House Press Secretary Karoline Leavitt accused Amazon of engaging in a “hostile and political act” after Punchbowl News reported the company planned to show the cost of Trump’s tariffs next to some products on its website. Amazon then issued a statement saying that the proposal “was never approved and is not going to happen.”
Ferguson has also spoken out about Big Tech, raising concerns about consolidation, censorship and data security.
Under the Biden administration, FTC Chair Lina Khan had pursued antitrust law enforcement against major tech companies, including Amazon, Meta and Microsoft.
Trump’s first administration also targeted Big Tech. The U.S. Department of Justice sued Google, accusing the company of illegally maintaining a monopoly in online search. A federal judge ruled that Google had violated antitrust law, but later spared the company this year from being required to sell its Chrome browser.
Amazon Prime is a subscription service, which costs $14.99 per month, that provides users benefits such as free delivery and access to content such as movies and TV shows. Amazon has an estimated 197 million U.S. Prime members this year, according to Consumer Intelligence Research Partners. The company generated more than $44 billion in subscription revenue in 2024.
Some analysts don’t think the settlement will slow down Amazon’s growth.
Zak Stambor, a senior analyst at eMarketer, said in a statement the payout is a small fraction of what Amazon makes through subscription revenue. And Amazon Prime’s perks are still enough to rope in consumers.
“Amazon may have made Prime easier to cancel, but the program remains deeply entrenched in most American households,” he said.
Amazon shares fell around 1% on Thursday.
