SEATTLE, Washington: Amazon has agreed to pay US$2.5 billion to resolve U.S. government claims that it misled millions of customers into enrolling in Prime memberships and then made it unnecessarily difficult for them to cancel, marking one of the most significant consumer protection settlements in history.

The Federal Trade Commission said on September 25 that the e-commerce giant will pay $1 billion in civil penalties — the largest fine ever levied by the agency for a rule violation — and return $1.5 billion to consumers who were either enrolled in Prime without explicit consent or frustrated by hurdles when trying to cancel.

The settlement was announced just days after a trial began in U.S. District Court in Seattle over allegations that Amazon violated the 2010 Restore Online Shoppers' Confidence Act. FTC officials said the company faced little chance of winning in court. "I think it just took a few days for them to see that they were going to lose. And they came to us and they paid out," said Chris Mufarrige, director of the FTC's Bureau of Consumer Protection.

Amazon denied wrongdoing but said it chose to settle to move on quickly. "Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers," spokesman Mark Blafkin said. "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."

Refunds and claims process
Some Prime members who signed up between June 23, 2019, and June 23, 2025, will automatically receive refunds of up to $51 through certain checkout flows, such as "Single Page Checkout." Payments are due within 90 days. Amazon must also create a claims process for more than 30 million other potentially affected customers.

Prime, which costs $139 annually or $14.99 monthly, has more than 200 million members worldwide and generated over $12 billion in subscription revenue in the most recent quarter, up 12% year-on-year.

FTC's findings
The FTC said Amazon intentionally designed its checkout process to nudge shoppers into Prime. In some cases, a button to complete a purchase did not clearly state that it would also trigger a Prime subscription. Canceling, meanwhile, was so drawn out internally that Amazon nicknamed it "Iliad," after the epic Trojan War siege, requiring users to confirm their choice across multiple screens.

The probe began under the Trump administration in 2021 and led to a lawsuit filed in 2023 under then-FTC Chair Lina Khan, a longtime Amazon critic. The FTC's broader antitrust lawsuit accusing Amazon of monopolistic practices remains ongoing.

Settlement terms
Amazon is barred from misrepresenting subscription terms, must clearly disclose costs, obtain express consent from customers, and provide cancellation processes that are not "difficult, costly, confusing, or time-consuming." The company said it has already adopted these measures in recent years and will maintain them going forward.

The penalty dwarfs past FTC consumer protection cases, though it is still smaller than the $5 billion fine imposed on Facebook (now Meta) in 2019 for privacy violations.