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Amazon has agreed to a record $2.5 billion settlement with the Federal Trade Commission (FTC) over allegations that it misled millions of customers into signing up for Amazon Prime subscriptions and made it unreasonably difficult to cancel.

The landmark Amazon Prime settlement includes both civil penalties and consumer refunds, marking one of the largest enforcement actions in FTC history.

Breakdown of the $2.5 Billion Settlement

• $1 billion in civil penalties – the largest ever imposed by the FTC.

• $1.5 billion in consumer refunds – to be distributed to Prime subscribers who were allegedly misled into joining or unable to easily cancel.

• An independent monitor will oversee Amazon’s compliance with the agreement.

According to the FTC, Amazon used “dark patterns”—design tricks in its website and app—to push users toward paid Prime subscriptions while obscuring cancellation options.

Who Is Eligible for an Amazon Prime Refund?

The FTC estimates up to 35 million Prime members could qualify for compensation if they enrolled between June 23, 2019, and June 23, 2025.

Refund details include:

• Automatic refunds up to $51 for users who signed up through certain enrollment flows and used three or fewer Prime benefits in any 12-month period.

• Additional claims available for subscribers who used more benefits or who attempted to cancel but faced obstacles. These members will need to submit a claim form within 180 days of receiving notice from Amazon.

Amazon’s Response

While agreeing to pay, Amazon denied wrongdoing and did not admit to violating the law. The company said the settlement is aimed at moving forward without prolonged litigation.

The agreement comes just days after a jury trial began in Seattle federal court.

New Requirements for Prime Sign-Ups

Under the settlement, Amazon must make several changes to its Prime subscription process:

• Add a clear “Decline Prime” button during sign-up.

• Provide transparent disclosures on price, auto-renewal, and cancellation.

• Ensure that canceling Prime is as simple as subscribing, whether on desktop, mobile, or app.

Why This Matters

The FTC says this case sets a major precedent for online subscriptions. Consumers should expect greater transparency in auto-renewal services and more straightforward cancellation processes across the tech industry.