New Delhi: Amazon has agreed to pay $2.5 billion to resolve a Federal Trade Commission (FTC) lawsuit alleging that the company misled millions of users into enrolling in and staying subscribed to Amazon Prime. The FTC described the settlement as “historic,” marking one of the largest resolutions in its history.
The lawsuit, filed in 2023, claimed Amazon used tricky website designs to coerce customers into Prime memberships while making cancellations unnecessarily difficult. Millions of users were reportedly drawn into paying for subscriptions they did not intend to keep.
The settlement allocates $1 billion in civil penalties and $1.5 billion in redress payments to affected customers. The trial had already begun in Seattle when Amazon opted to settle.
Amazon denied any wrongdoing. Spokesperson Mark Blafkin stated that the company has always complied with the law and worked to make Prime sign-ups and cancellations clear and straightforward. Amazon will also implement changes to its website to ensure transparency for future users.
Who is Eligible for Refunds:
Customers who signed up for Amazon Prime between June 23, 2019, and June 23, 2025, and either:
Tried but failed to cancel their subscription, or
Signed up through certain “challenged” pages, including the Single Page Checkout or Prime Video enrollment flow.
Refunds will vary depending on fees paid, with a maximum of $51 per customer.
How Refunds Will Be Issued:
Automatic payments will be sent to users who used Prime benefits three times or fewer in any 12-month period, by December 24, 2025.
Others will receive instructions from a third-party claims administrator by January 23, 2026, with the deadline for filing claims being July 23, 2026.
FTC Chair Andrew Ferguson called the settlement a “monumental win,” ensuring Amazon will not repeat the alleged practices.
