Amazon to Pay $2.5 Billion in Historic FTC Settlement Over Prime Subscription ‘Traps’
Last updated September 29, 2025
Amazon has agreed to pay $2.5 billion to settle allegations that it “enrolled millions of consumers in Prime subscriptions without their consent and knowingly made it difficult for consumers to cancel.”
As Checkbook reported in 2023, when the Federal Trade Commission (FTC) filed this case, Amazon denied tricking customers into signing up for Prime, with an annual cost of $139.
But on Sept. 24, the company agreed to pay the government a civil penalty of $1 billion and refund $1.5 billion to approximately 35 million customers harmed by what the FTC described as “deceptive Prime enrollment practices.”
“The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime and then made it exceedingly hard for consumers to end their subscription,” said FTC Chairman Andrew Ferguson.
In a statement issued after the settlement, Amazon said, “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership.”
This historic settlement was announced following opening arguments in the case, which was being held in a federal courtroom in Seattle. It’s the largest civil penalty ever paid for violating an FTC rule and the second-largest restitution for consumers resulting from an FTC lawsuit.
While Amazon did not admit to any wrongdoing as part of this settlement, the world’s largest online retailer agreed to “cease unlawful enrollment and cancellation practices” for Prime by:
- Having a clear and conspicuous button for customers to decline Prime. Amazon can no longer have a button that says, “No, I don’t want Free Shipping.”
- Including clear and conspicuous disclosures about all material terms of Prime during the enrollment process, such as the cost, the date and frequency of charges to consumers, whether the subscription auto-renews, and cancellation procedures.
- Creating an easy way for consumers to cancel Prime, using the same method that was used to sign up.
If the court approves this settlement, qualifying Prime customers will receive up to $51 each before the end of the year. Customers who have only used Prime benefits (such as free shipping) three or fewer times should hear that they will receive their payments automatically. Other customers will need to file a claims form. That process has not been established yet.
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Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Blue Sky, X, Instagram, and at ConsumerMan.com.