Amazon ($AMZN) agreed to a $2.5 billion settlement with the Federal Trade Commission over allegations it misled customers into enrolling in Prime and made cancellations excessively difficult, marking the largest civil penalty ever in an FTC rule violation case.
Key facts:
- The settlement includes $1.5 billion in refunds for about 35 million Prime customers, averaging $51 each.
- Amazon will also pay a $1 billion civil penalty, the largest in FTC history for deceptive practices.
- Refunds apply to customers who enrolled via Single Page Checkout between June 2019 and June 2025.
- Amazon must make enrollment and cancellation clearer, adding a visible option to decline Prime and simplifying cancellation steps.
- Prime remains a key driver for Amazon, with more than 200 million members generating over $12 billion in subscription revenue last quarter.
- The FTC continues to probe Amazon separately for potential antitrust violations tied to pricing and competition.
Relevant Companies
- Amazon ($AMZN): Directly impacted by the $2.5 billion settlement and required changes to Prime subscription practices.
Editor’s Note: This is a developing story. This article may be updated as more details become available.
