A huge win for consumers
Amazon resolved a record $2.5 billion case with the Federal Trade Commission (FTC) on September 25 after waging a two-year legal fight. The FTC claimed Amazon had tricked consumers into enrolling in Prime and made it virtually impossible to cancel the service.
Under the deal, Amazon will pay a $1 billion civil penalty and $1.5 billion in refunds to customers who were affected by the deceptive acts. The FTC declared it is the largest civil penalty ever for breaking a rule and the second-largest refund order in the agency’s history.
FTC Chairman Andrew N. Ferguson called it a “record-breaking victory” for tens of millions of exasperated Americans who struggled to cancel bewildering and difficult-to-stop subscriptions. He said the case showed Amazon used “sophisticated subscription tricks” to enroll people into Prime without their direct consent.
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“This settlement puts billions of dollars in Americans’ pockets,” Ferguson went on, “and ensures Amazon never does it again.”
How Much Money Can You Get?
If you are an eligible Amazon Prime member, you might be entitled to as much as $51 under the settlement.
Your payment will depend on for how many years you’ve paid for your Prime membership. For example, if you paid several months’ worth of Prime fees before it occurred to you that you were enrolled, your refund might be higher.
The refund fund will be taken from the $1.5 billion of the settlement that will go to injured consumers.
Who is eligible for a refund?
According to Axios, the refund is to customers who signed up for Amazon Prime between June 23, 2019, and June 23, 2025.
There will be two payout phases:
Automatic Refunds:
The first category of eligible Prime members will be automatically compensated within 90 days. The category includes customers who enrolled in Prime through what the FTC terms a “challenged enrollment flow” — i.e., the process alleged to have deceived users into subscribing — and who purchased no more than three Prime perks during any 12 months.
The second group will be asked to fill out a form in order to get their refund. This will begin once the first payout phase is completed.
Both groups will see their refunds capped at $51 each.
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What changes are coming to Amazon?
Amazon was charged by the FTC with violating the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) through deceptive means to sign up tens of millions of people.
Under the lawsuit, Amazon designed confusing user interfaces that tricked consumers into signing up for Prime without knowing it and then made it extremely hard to cancel their membership.
Under the settlement, Amazon has to make some changes:
Include an obvious “No” button. Amazon must include a conspicuous, easy-to-spot button that allows customers to decline Prime membership. The company is no longer able to use gibberish like “No, I don’t want free shipping” to coerce customers into joining.
Please keep it simple to cancel. Amazon must include a simple cancellation procedure that’s as uncomplicated as sign-up — no time-consuming menus, pop-ups, or hidden steps.
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These changes are meant to make Amazon’s subscription model clearer and fairer to customers.
Amazon’s response
Amazon issued a public statement in response to the settlement announcement that said it did not agree with the FTC’s claims but wanted to get the issue behind it.
“Amazon and its management have never acted outside the law, and this settlement allows us to look forward,” said Amazon spokesman Mark Blafkin. “We make it easy and clear for customers to join or terminate their Prime membership, and we will continue to improve for millions of committed Prime members worldwide.”
What happens next
If you think you are owed a refund, look for a notification in your Amazon account or by email in the coming months. Eligible customers will see payments made within 90 days of final approval of the settlement.
With billions going back to customers and major changes on the path to Amazon policies, this settlement is a huge win for fairness and transparency in online buying.
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