Amazon has consented to a substantial $2.5 billion settlement following accusations from the U.S. Federal Trade Commission (FTC) that it misled millions into unwanted Prime memberships. The FTC announced the settlement on Thursday, labeling it a significant triumph against “dark patterns”—manipulative design strategies that coax consumers into erroneous affirmatives. Of the total settlement, $1 billion will serve as penalties, while $1.5 billion is earmarked for refunds to affected Prime subscribers. Reports suggest that approximately 35 million individuals might qualify for compensation. Court filings reveal that users who registered for Prime between June 2019 and June 2025 through promotional offers but seldom utilized the service will automatically receive $51 each.
Additionally, those who attempted to cancel during the same timeframe will have the opportunity to file reimbursement claims. Despite the unprecedented penalty, Amazon’s financial stability appears largely unaffected. The company generates around $2.5 billion in revenue every 33 hours, and investors showed minimal concern, with stock prices remaining relatively stable post-announcement. In a statement, Amazon remarked that the settlement enables it to progress and concentrate on customer service. The company emphasized its efforts to ensure clarity and simplicity in both signing up for or canceling Prime memberships, while providing substantial value to its millions of loyal Prime subscribers.
As part of the agreement, Amazon will enhance its Prime interface by introducing clearer opt-out options, simplifying cancellations, and providing upfront disclosures of subscription terms. An independent monitor will supervise compliance. Nevertheless, Amazon asserted that most of these modifications were already implemented, indicating that the settlement primarily obligates it to continue existing changes rather than introduce new ones. The FTC’s lawsuit presented a contrasting narrative, claiming that between 2017 and 2022, Amazon deliberately constructed confusing processes to compel customers into Prime.
Internal communications unveiled during the investigation suggested that employees acknowledged the deceptive practices, with one characterizing the situation as “a bit of a shady world” and another cautioning that misleading sign-ups were “an unspoken cancer.” FTC Chair Andrew Ferguson hailed the settlement as “a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.” This settlement marks the second-largest consumer restitution in FTC history and is part of a wider initiative targeting manipulative tactics employed by large tech companies. However, not everyone viewed the outcome favorably.
Former FTC Chair Lina Khan, who initially initiated the case, criticized the settlement on X, stating it was merely “a drop in the bucket for Amazon and, no doubt, a big relief for the executives who knowingly harmed their customers.” Nonetheless, analysts remain confident that Amazon Prime continues to be resilient. Since its launch in 2005 at $79 annually, Prime has evolved into a $139-per-year giant, generating nearly $24 billion in subscription revenue in the first half of 2025 alone. As eMarketer analyst Zak Stambor remarked, “Amazon may have made Prime easier to cancel, but the program remains deeply entrenched in most American households.” Ultimately, despite the hefty settlement, Amazon’s connection with its subscribers seems as strong as ever.