Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC) over allegations that it employed deceptive tactics to enroll customers in its Prime subscription service and then made it difficult for them to cancel. The FTC's lawsuit, initially filed in 2023, accused Amazon of using "dark patterns" and manipulative user interface designs to trick consumers into unknowingly signing up for automatically renewing Prime memberships. The settlement, announced on September 25, 2025, resolves these allegations.

Key Provisions of the Settlement

• Financial Penalties and Refunds: Amazon will pay a $1 billion civil penalty, the largest ever in an FTC rule violation case. Additionally, the company will provide $1.5 billion in refunds to an estimated 35 million consumers who were affected by the deceptive enrollment practices. Eligible customers could receive up to $51 each.
• Changes to Enrollment and Cancellation Practices: Amazon is required to make significant changes to its Prime enrollment and cancellation processes. These changes include:
  • Adding a "clear and conspicuous" button allowing customers to decline a Prime membership offer.
  • Providing clear and conspicuous disclosures about all material terms of Prime during the enrollment process, such as the cost, the date and frequency of charges, whether the subscription auto-renews, and cancellation procedures.
  • Ensuring the cancellation process is not difficult, costly, confusing, or time-consuming.
• Independent Oversight: Amazon will be required to pay for an independent, third-party supervisor to monitor compliance with the consumer redress distribution process.

FTC Allegations and Amazon's Response

The FTC alleged that Amazon created confusing and deceptive user interfaces to lead consumers to enroll in Prime without their knowledge. Furthermore, the agency claimed that Amazon knowingly complicated the cancellation process to prevent consumers from ending their subscriptions. Internally, Amazon allegedly referred to the complex cancellation process as "Iliad," alluding to the lengthy Trojan War in Homer's epic poem.

Amazon, however, has neither admitted nor denied the allegations in the complaint. In a statement, the company said that Amazon and its executives have "always followed the law" and that the settlement allows them to "move forward and focus on innovating for customers". Amazon maintains that it works hard to make it clear and simple for customers to both sign up for and cancel their Prime memberships.

Impact on Consumers and the Subscription Industry

The settlement is expected to provide substantial relief to consumers who were tricked into unwanted Prime memberships or faced difficulties canceling their subscriptions. FTC Chairman Andrew N. Ferguson hailed the settlement as a "monumental win" for consumers, stating that the agency is putting billions of dollars back into Americans' pockets and ensuring Amazon does not repeat these practices.

The Amazon settlement sends a strong message to the broader subscription industry about the importance of clear disclosures, easy cancellation processes, and avoiding deceptive marketing tactics. The FTC aims to hold all marketers accountable to the spirit of the "click to cancel" rule, ensuring frictionless processes and transparency to combat "subscription traps".

How Consumers Can Claim Refunds

Prime customers who signed up for a membership through Amazon's "Single Page Checkout" between June 23, 2019, and June 23, 2025, may be eligible for a refund. The refund process will occur in two phases:

• Automatic Payouts: Customers who used three or fewer Prime benefits in a 12-month period may receive an automatic payment within 90 days. These customers may be eligible for automatic refunds of up to $51.
• Claims Process: Other eligible customers will have the opportunity to make a claim through a form sent by Amazon. Customers will have up to 180 days to submit the claims form through email, First-Class postage pre-paid mail, or the settlement website. Those who used no more than 10 Prime benefits during a 12-month period of their subscription will be able to indicate whether they subscribed unintentionally, tried to cancel unsuccessfully, or both.

Criticism and Ongoing Scrutiny

Despite the landmark settlement, some critics argue that the penalties are insufficient, considering Amazon's vast revenue and market capitalization. Former FTC Chair Lina Khan suggested that the settlement absolved the company of its full culpability, with the penalty representing a small fraction of Amazon's overall worth.

Amazon still faces another lawsuit brought by the FTC in 2023, alleging that the company is an exploitative monopoly and illegally suppressed competition among online marketplaces. That trial is expected to begin in early 2027.