Amazon has agreed to a record $2.5 billion settlement after being accused of tricking customers into Prime subscriptions and making cancellation too difficult. The FTC announced the deal Thursday, calling it a major win for consumers.
The agreement includes a $1 billion civil penalty and $1.5 billion in refunds to impacted customers. “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again,” FTC Chairman Andrew Ferguson said.
Refunds will be distributed in two waves. The first group—customers who signed up through a “challenged enrollment flow” and used Prime benefits sparingly—will get automatic payouts within 90 days, capped at $51.
The second group—customers who either signed up under the same conditions or struggled to cancel—will need to submit a form. They also qualify only if they used fewer than 10 Prime benefits in any 12-month period. These payments are also capped at $51.
Amazon said the settlement lets the company “move forward” while insisting it has “always followed the law.” Spokesperson Mark Blafkin added that the company works to make sign-ups and cancellations clear and easy while continuing to provide “substantial value” for members.
The settlement also forces Amazon to introduce new safeguards: a clear “decline Prime” button, upfront disclosures of terms, a streamlined cancellation process, and third-party compliance monitoring.
Amazon claims many of these changes were already implemented years ago, but regulators say the deal ensures stricter oversight going forward.