Amazon will pay $2.5 billion to resolve allegations by the Federal Trade Commission (FTC) that it deceived customers into signing up for its Prime membership. The settlement includes $1 billion in fines and $1.5 billion in reimbursements to about 35 million customers, many of whom will automatically receive $51 each.
The FTC claimed that, between 2017 and 2022, Amazon deliberately made it difficult for users to cancel Prime or decline subscriptions. It also accused Amazon executives of rejecting proposed changes that would have made the sign-up process more transparent. The company implemented improvements only after coming under investigation in 2022.
Clearer Cancellation and Sign-Up Options
As part of the settlement, Amazon must now make it easier for users to cancel Prime and clearly disclose subscription terms during sign-up. It will also add a prominent “Decline Prime” button and pay for an independent compliance monitor to ensure it meets these requirements.
Additionally, users who struggled to cancel Prime between June 23, 2019, and June 23, 2025, can file claims for compensation.
Amazon’s Response
Despite the massive payout, Amazon did not admit any wrongdoing. In a statement, the company said the agreement allows it to “move forward and focus on customers.” It also emphasized that most of the changes required by the settlement are already in place.
“We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership,” Amazon said.
Impact on Amazon and Consumers
While $2.5 billion is a significant sum, the financial impact on Amazon is minimal — the company generates a similar amount in revenue every 33 hours. Nevertheless, the settlement marks a major win for consumer rights and signals tougher scrutiny of subscription practices by regulators. It also sets a precedent for how tech giants must handle recurring billing transparency in the future.
