Amazon Prime settlement: FTC deal sets out $2.5bn in penalties and refunds
Amazon Prime settlement talks in Seattle have ended with a $2.5bn agreement that the US Federal Trade Commission says will return money to millions of customers and change how the service is sold. The package includes $1.5bn for refunds and a $1bn civil penalty, with Amazon agreeing to make sign-up terms clearer and cancellation simpler. Amazon did not admit wrongdoing.
According to the case documents, the FTC accused the company of using design choices that nudged people into enrolling for Prime and made it harder to leave. The agency says the redress will offer automatic refunds of $51 to some subscribers who used the service very little, with others able to make a claim.
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The order also requires plainer language when customers face pop-ups that promote Prime during checkout, and a straightforward route to cancel online. Amazon said it has always followed the law but wanted to move on rather than continue a lengthy court fight.
For the official terms and compliance requirements, the details are published in the Federal Trade Commission’s settlement notice.
Consumer groups in the US have called for a wider rule to standardise cancellation across subscriptions. A proposed federal “click to cancel” measure was recently set back by an appeals court, although state-level rules still apply.
The Amazon Prime settlement caps a trial that had just begun, while a separate antitrust case against the company continues on a different timeline. For customers, the immediate focus is on refunds and on clearer choices at checkout. The settlement also signals how regulators are likely to judge online subscription design in future.
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[Image Credit | Consumer Reports]
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