Amazon Reaches $2.5 Billion Settlement With FTC Over Prime Subscription Deceptive Practices
Written by b87fm on 09/25/2025
Amazon has agreed to a historic $2.5 billion settlement with the Federal Trade Commission (FTC) over allegations that it misled customers into signing up for its Prime subscription and made it difficult to cancel. The deal, announced Thursday (September 25), ends a two-year legal battle between the e-commerce giant and the federal watchdog.
The settlement includes a $1 billion civil penalty and $1.5 billion in refunds to roughly 35 million customers affected by the alleged practices. According to the FTC, it marks the largest civil penalty ever imposed under an FTC rule violation and the second-highest restitution award in agency history.
The 2023 lawsuit accused Amazon of using “subscription traps” to enroll customers in Prime, then making it overly complicated to cancel. FTC Chairman Andrew Ferguson called the settlement a “monumental win” for consumers, adding, “The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”
Amazon agreed to the settlement without admitting wrongdoing, emphasizing its focus on customer satisfaction. Spokesperson Mark Blafkin said, “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership.”
Under the agreement, Amazon must:
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Clearly disclose Prime’s terms during enrollment
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Offer straightforward cancellation options
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Obtain express customer consent before charging for a subscription
Despite the massive payout, the $2.5 billion settlement represents only about 5.6% of Prime’s $44 billion subscription revenue from the previous year. Since its 2005 launch, Prime has grown into one of the world’s most popular subscription services, with over 200 million members globally.
