Amazon has agreed to a blockbuster $2.5 billion settlement to resolve the Federal Trade Commission’s consumer protection lawsuit over its Prime subscription program, the FTC announced Thursday. The stunning deal was reached only days into what had been expected to stretch into a monthlong trial.
The settlement forces Amazon to pay a $1 billion civil penalty and return $1.5 billion in refunds to consumers who were allegedly misled by its labyrinthine Prime enrollment and cancellation system.
FTC Blasts “Subscription Traps”
FTC Chairman Andrew N. Ferguson heralded the deal as “a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.”
According to Ferguson, the commission’s evidence painted a troubling picture: Amazon allegedly engineered “sophisticated subscription traps” that funneled consumers into Prime while burying exit ramps under a maze of obstacles.
“The evidence showed that Amazon used manipulative tactics to push people into enrolling in Prime, then made it exceedingly hard for them to leave,” Ferguson said. “Today, we are putting billions of dollars back into Americans’ pockets, and ensuring Amazon never does this again.”
