Amazon has agreed to pay $2.5 billion to settle Federal Trade Commission (FTC) allegations that it misled tens of millions of customers into enrolling in its Prime program.
“The Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel,” FTC Chairman Andrew Ferguson said in a statement. “The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”
The FTC filed the lawsuit in 2023 under the Biden Administration, arguing that the mega corporation had tricked tens of millions of customers into enrolling in its Prime subscription program and deliberately made it exceedingly onerous to cancel it. Prime membership costs $14.99 per month or $139 per year and provides benefits, including free shipping, grocery delivery, access to streaming content, and exclusive deals.
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What the Lawsuit is About:
The FTC sued Amazon over allegations that the company misled millions of customers into subscribing to its Amazon Prime service. At the heart of the case is Amazon’s use of deceptive design tactics, often called “dark patterns,” that nudged people into signing up for Prime through confusing free-trial offers. On top of that, the company made canceling subscriptions frustratingly difficult. The result: millions of customers ended up stuck with charges they never fully intended or understood.
The lawsuit stemmed from consumer complaints and investigations starting around 2023, when users reported confusing sign-up processes and problems cancelling their Prime memberships. The FTC launched an inquiry into Amazon’s subscription practices, focusing on whether the company’s user interface and marketing tactics violated consumer protection laws by manipulating customers.\
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During the investigation, leaked internal documents revealed Amazon employees knowingly used these tactics. Emails described subscription sign-ups as “shady” and “manipulative,” showing awareness of the controversial methods used to boost membership numbers.
“Dark patterns” are website or app design tricks that push users toward actions they might not want—like signing up for a subscription or making it hard to unsubscribe. In this case, Amazon’s design made it easy to accidentally join Prime and tough to cancel, resulting in millions being charged unintentionally.
The FTC’s lawsuit challenged these practices as unfair and deceptive, seeking to protect consumers from being trapped in subscriptions they didn’t fully agree to. The resulting settlement requires Amazon to pay billions in penalties and refunds, improve transparency around Prime, and simplify cancellation. This case sets an important precedent on how subscription services must treat customers fairly and clearly in the digital age.