SEATTLE—In a historic settlement, Amazon has agreed to pay a total of $2.5 billion to resolve a lawsuit with the U.S. Federal Trade Commission (FTC) regarding its Prime membership program. The settlement, which includes a $1 billion civil penalty and $1.5 billion in consumer refunds, addresses allegations that Amazon used “dark patterns” and deceptive design practices to trick consumers into signing up for Prime and then made it purposefully difficult to cancel their subscriptions.
The FTC’s complaint, filed in 2023, accused Amazon of violating the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). The agency’s investigation revealed that Amazon’s user interface was designed to mislead customers, often enrolling them in auto-renewing Prime memberships without their explicit consent. Internal documents from Amazon reportedly described these unwanted subscriptions as an “unspoken cancer” and the cancellation process as a “labyrinthian mechanism” known internally as “Iliad,” a reference to the lengthy Trojan War.
A Win for Consumer Protection
The settlement is considered a major victory for the FTC and its 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,” Ferguson said in a statement. “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
While Amazon denies any wrongdoing, a company spokesperson stated that the settlement allows them to “move forward and focus on innovating for customers.” The deal was reached just days into what was expected to be a month-long jury trial in Seattle.
What the Settlement Means for Consumers
As part of the settlement, Amazon is required to make significant changes to its sign-up and cancellation processes. This includes:
- Providing a clear and conspicuous button for customers to decline a Prime subscription.
- Clearly disclosing all material terms of the Prime membership, such as cost and auto-renewal, during the sign-up process.
- Establishing an “easy way” for consumers to cancel Prime that is not “difficult, costly, or time-consuming” and uses the same method by which the consumer enrolled.
The $1.5 billion in consumer redress will be distributed to affected customers. Those who were unintentionally enrolled or were deterred from canceling their subscriptions between June 23, 2019, and June 23, 2025, may be eligible for a refund. Some customers who used Prime infrequently may receive an automatic refund of up to $51, while others will need to submit a claim form.
This settlement serves as a warning to other companies that use similar manipulative tactics, often referred to as dark patterns, to boost subscription numbers. The case highlights the ongoing effort by regulators to protect consumers from deceptive online practices.
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