Amazon will pay a massive $2.5 billion to settle a dispute with the Federal Trade Commission (FTC) over its Prime subscription practices, the agency announced Thursday. The move ends a two-year legal battle that accused the e-commerce giant of tricking millions of consumers into signing up for Prime and making it extremely difficult to cancel. The break down of settlement Under the settlement, Amazon will pay a $1 billion civil penalty and provide $1.5 billion in refunds to roughly 35 million affected customers. According to the FTC, this is the largest civil penalty ever in a case involving a rule violation and the second-highest restitution award in the agency’s history. The lawsuit, filed in 2023 during the Biden administration, specifically targeted Amazon’s cancellation policies. The settlement came just days after the trial began. FTC calls it a “Record-Breaking Win” “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 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,” he added. He added that Amazon had used “sophisticated subscription traps” to enroll customers in Prime and then made it very hard for them to leave. Amazon responds Amazon spokesperson Mark Blafkin stated,”We have always followed the law. This settlement allows us to focus on innovating for our customers. We aim to make signing up and cancelling Prime clear and simple, while continuing to provide value to our millions of loyal members.” The company did not admit any wrongdoing, and it confirmed that it has implemented changes required by the FTC. Key changes to Prime As part of the agreement: Prime’s growth and influence Prime, which costs $14.99 per month or $139 per year, started as a fast-delivery service but has since expanded into streaming, grocery and food delivery, fuel discounts, and exclusive deals. While Amazon does not officially disclose US subscriber numbers, analysts estimate 197 million members as of March 2025. Last year, Prime generated $44 billion, meaning the $2.5 billion settlement equals just 5.6% of Prime’s revenue, significant but not enough to affect its dominance.
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