Amazon has reached a landmark $2.5 billion settlement following accusations from the Federal Trade Commission (FTC) alleging that the company enrolled users in its Prime subscription service without their consent and made cancellation processes overly complicated. This agreement is expected to benefit approximately 35 million customers.
FTC Chairman Andrew N. Ferguson emphasized the significance of the settlement, stating, “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.” The settlement comprises a $1 billion civil penalty and $1.5 billion allocated for customer refunds, marking it as the FTC’s largest settlement and the second-highest refund award ever.
Eligibility criteria for refunds include individuals who signed up for Amazon Prime between June 23, 2019, and June 23, 2025, or those who attempted to cancel their subscriptions unsuccessfully during this timeframe. To qualify, customers must also be based in the United States. Refunds are capped at $51 per eligible customer and will be distributed in two phases.
Automatic refunds will go to customers who enrolled through specific “challenged enrollment flows,” such as the Universal Prime page or the Prime Video section, provided they utilized three or fewer Prime benefits within any 12-month span after enrollment. These customers can expect their refunds within 90 days following the FTC order.
For those who signed up through a challenging enrollment flow or sought to cancel Prime unsuccessfully but utilized up to 10 Prime benefits in a year, a claim form will need to be submitted after the initial automatic payments are completed. Amazon will notify these customers via email and mail within 30 days post-payment.
The FTC’s investigation revealed that Amazon employed “sophisticated subscription traps” to confuse shoppers into signing up for Prime. Such practices reportedly involved misleading enrollment methods and obscured cancellation options, impacting an estimated 35 million individuals throughout the mentioned period.
In response, Amazon has asserted that it and its executives have adhered to legal standards, viewing this settlement as a means to progress and concentrate on customer innovation. Customers who have been Prime members or attempted to cancel their subscriptions from mid-2019 to mid-2025 are encouraged to monitor for refund notifications in the coming months. The official claims process and website will be announced by the FTC and Amazon shortly, with details expected to be accessible on both platforms. Eligible individuals will have 180 days from the receipt of their claim form to submit it through various channels.
