Amazon to Pay $2.5 Billion to Settle FTC Lawsuit Over Prime “Cancellation Trickery

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The lawsuit involved claims that some users, who can get up to $51 under the deal, intended to sign up solely for a lower-cost Prime Video subscription.

Three days into trial, Amazon has agreed to pay $2.5 billion to settle a lawsuit from the Federal Trade Commission accusing the tech giant of duping consumers into signing up for Prime subscriptions, which users were impeded from canceling.

The lawsuit, filed under the Biden administration in 2023 in the opening salvo against Amazon’s retail dominance, alleged the company adopted a “coercive” user interface to trick users into enrolling in automatically renewing memberships. It involved claims that some people intended to sign up solely for Prime Video, a lower-cost option

Under the deal, reached on Thursday, $1.5 billion will go to eligible users, who can receive up to $51. The remainder of the settlement constitutes a fine.

In a statement, Amazon spokesperson Mark Blafkin said the agreement “allows us to move forward and focus on innovating for customers.” He added, “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world.”

The FTC detailed an intentionally deceptive subscription process on its website known as “dark patterns” to enroll consumers into Prime without consent. It faulted the company for presenting to users numerous opportunities to subscribe before they can place their order on the final checkout page. On desktop, consumers are presented with a prominent button to enroll in Prime and a comparatively inconspicuous link to decline, the suit alleged. On mobile, Amazon places the terms of Prime, like price and auto-renewal policies, at the very bottom of the page that’s not viewable unless users scroll down.

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