WASHINGTON, D.C. — The Federal Trade Commission announced Thursday it has reached a historic settlement with Amazon.com, Inc., and two of its executives, resolving allegations the company enrolled millions of consumers in Prime without their consent and made it difficult for them to cancel.
Under the agreement, Amazon will pay a $1 billion civil penalty and provide $1.5 billion in refunds to consumers. The company must also stop unlawful Prime enrollment and cancellation practices.
“Today, the Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel,” said FTC Chairman Andrew N. Ferguson. “The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription. Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again. The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”
The FTC alleged that Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) by designing deceptive user interfaces that caused consumers to unknowingly enroll in Prime. Officials said the company also made cancellation unnecessarily complex to prevent customers from leaving the program.
According to court documents, Amazon employees and executives discussed these practices internally, with one comment noting that “subscription driving is a bit of a shady world” and another describing unwanted subscriptions as “an unspoken cancer.”
The monetary judgment is the third ROSCA case in which the FTC has obtained a civil penalty, and the consumer redress package is the second-largest restitution award in the agency’s history.
As part of the order, Amazon must:
- Add a clear option for consumers to decline Prime without manipulative phrasing, such as “No, I don’t want Free Shipping.”
- Clearly disclose all material terms of Prime during sign-up, including cost, billing frequency, auto-renewal, and cancellation procedures.
- Provide an easy cancellation process using the same method by which a consumer enrolled.
- Pay for an independent third-party supervisor to oversee consumer redress distribution.
The Commission voted 3-0 to approve the stipulated final order, which was filed in the U.S. District Court for the Western District of Washington.
