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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.”

Billions Back to Consumers

The settlement not only imposes one of the largest civil penalties in FTC history but also compels Amazon to overhaul its Prime enrollment and cancellation practices going forward. The company must simplify its sign-up and exit processes, bringing an end to what regulators characterized as a deliberate design to frustrate customers.

For millions of subscribers, the $1.5 billion refund pool marks a rare victory in a consumer protection case that strikes directly at one of the largest companies in the world.

Looking Ahead

While Amazon did not immediately comment on the settlement, the agreement marks one of the most aggressive enforcement actions against the tech giant to date. For the FTC, it’s a symbolic showdown—an agency taking on the retail titan and emerging with a multibillion-dollar concession.

The Prime subscription, a cornerstone of Amazon’s empire, will remain—but the tactics that built its subscriber base now face strict regulatory guardrails.