Amazon has agreed to pay $2.5 billion to settle a lawsuit from the U.S. Federal Trade Commission (FTC), which accused the company of tricking millions of customers into signing up for its Prime membership and making it difficult to cancel.
Under the settlement, Amazon will pay a $1 billion civil penalty and return $1.5 billion to about 35 million customers who were impacted by the company’s “deceptive” sign-up process. The agreement also requires Amazon to stop its unlawful enrollment and cancellation practices for Prime.
The settlement comes after a lawsuit filed by the FTC in 2023, which alleged Amazon used so-called “dark patterns” to mislead customers into signing up for Prime. According to the complaint, Amazon executives knew about these practices and deliberately made cancellation difficult by forcing users through unnecessary steps. A jury trial had already begun in Seattle, but the case ended early after the settlement was reached.
As part of the agreement, Amazon must now make major changes to how customers sign up for and cancel Prime. The FTC is requiring the company to add a “clear and conspicuous button” for declining a Prime subscription and to stop using misleading options such as “No, I don’t want Free Shipping.” The company must also simplify the cancellation process, ensuring it is no more complicated than the steps customers take to sign up. Additionally, Amazon must clearly disclose Prime’s terms and conditions, including cost, auto-renewal policies, and cancellation procedures, during enrollment.
In response, Amazon stated that it has always followed the law and that the settlement allows it to move forward and continue focusing on 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,” the company said. Meanwhile, FTC Chairman Andrew Ferguson said, “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.”
This settlement resolves one of several legal battles between Amazon and the FTC. The agency has also filed an antitrust lawsuit against the company, accusing it of punishing third-party sellers who offer lower prices outside Amazon’s marketplace. That case is expected to go to trial in 2027.
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