Amazon settles its FTC lawsuit and agrees to pay billions for tricking customers into Prime subscriptions. In September, the retail giant settled its case with the Federal Trade Commission over whether it had misled customers who signed up for the membership service.

The $2.5 billion settlement is one of the largest consumer protection settlements in US history, and while the company did not admit to wrongdoing, it’s still changing things. The FTC said $1.5 billion will go into a fund to repay eligible subscribers, with the remaining $1 billion collected as a civil penalty.

Company required to simplify Prime enrollment

The settlement requires the retailer to add a clear and conspicuous option to decline Prime during checkout and to simplify the cancellation process. Mark Blafkin, senior manager, said in a statement that Amazon and its executives have always followed the law, and this settlement allows them to move forward and focus on innovating for customers.

Amazon works 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 many millions of loyal members around the world, according to Blafkin.

FTC accused company of using dark patterns

The FTC filed suit in 2023, accusing the e-commerce giant of using dark patterns to nudge people into Prime subscriptions and then making it too hard to cancel. The FTC maintained the company was in violation of Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act.

Specifically, the retailer used manipulative, coercive or deceptive user interface designs known as dark patterns to trick consumers into enrolling in automatically renewing Prime subscriptions, the FTC complaint states. The agency focused on specific enrollment pages that it claimed were designed to confuse customers.

Settlement covers 6-year enrollment period

The legal settlement is limited to customers who enrolled in Prime between June 23, 2019, and June 23, 2025. It’s also restricted to customers who subscribed using a challenged enrollment flow or who enrolled through any method but were unsuccessful in canceling their memberships.

The FTC called out specific enrollment pages, including Prime Video enrollment, the Universal Prime Decision page, the Shipping Option Select page and the Single Page Checkout. To qualify for a payout, claimants must also not have used more than 10 Prime benefits in any 12 month period.

Automatic payments for some customers

Customers who signed up via those challenged processes and did not use more than three Prime benefits within one year will be paid automatically within 90 days. Other eligible customers will need to file a claim, and Amazon is required to send notices to those people within 30 days of making its automatic payments.

Customers who did not use a challenged sign up process but instead were unable to cancel their memberships will also need to file claims for payment. The distinction between automatic payments and required claims depends on usage patterns during membership.

Maximum payout reaches $51 per customer

Payouts to eligible claimants will be limited to a maximum of $51. That amount could be reduced depending on the number of Prime benefits customers used while subscribed to the service. Those benefits include free two day shipping, watching shows or movies on Prime Video or Whole Foods grocery discounts.

Changes aim to prevent future issues

Beyond the financial penalties, the settlement’s requirement that Amazon simplify enrollment and cancellation processes addresses the FTC’s core concern about consumer protection. The retailer must now provide clearer options for declining Prime during checkout, eliminating the confusing flows that allegedly pushed customers into unwanted subscriptions.

The cancellation process improvements represent another significant change. Previous complaints from consumers and regulators focused on how difficult the company made it to cancel Prime memberships, with multiple confirmation steps and retention offers creating obstacles for those seeking to end their subscriptions.

Settlement reflects broader scrutiny of tech practices

The settlement fits into a broader pattern of regulatory scrutiny of big tech companies’ subscription practices and user interface designs. The $2.5 billion penalty sends a message about the cost of allegedly deceptive practices, even when companies don’t admit wrongdoing.

As customers await their payments and Amazon implements the required changes, the settlement stands as one of the most substantial consumer protection actions in recent history.