The Federal Trade Commission secured a $2.5 billion settlement with Amazon to resolve allegations that the company used deceptive enrollment and cancellation practices in its Prime program, comprising $1.5 billion in consumer redress and a $1 billion civil penalty.
The FTC said the redress will reach an estimated 35 million consumers and that some eligible users will receive automatic payments of up to $51, while others will be asked to submit claims under a two‑wave distribution plan.
The settlement brings to a close litigation that began with the FTC’s June 2023 complaint and followed a partial summary judgment finding that Amazon violated at least one element of the Restore Online Shoppers Confidence Act by failing to disclose material subscription terms before collecting payment information.
Under the court order, Amazon must stop the challenged enrollment and cancellation practices, add clear and conspicuous disclosures and a plainly labeled decline button, create an easy cancellation pathway using the same method customers used to enroll, and submit to third‑party compliance monitoring.
Amazon did not admit wrongdoing in the settlement and said it has improved its user flows, while the FTC characterized the agreement as a landmark enforcement action aimed at curbing so‑called dark patterns and returning billions to harmed consumers.
Excerpts from jurist.org article by Daniel Kim | U. Ottawa Faculty of Law, CA
