Amazon settled with the Federal Trade Commission (FTC) for $2.5 billion after being accused of deceiving customers during Amazon Prime sign-ups.
The company did not admit liability, but the settlement, one of the biggest consumer protection settlements in US history, does mandate that Amazon make some major changes to its subscription and cancellation process.
The FTC sued the tech giant in 2023, alleging the company employs manipulative ‘dark patterns’ to steer users into automatically renewing Amazon Prime subscriptions.
The complaint involved violations of the FTC Act’s Section 5 as well as the Restore Online Shoppers’ Confidence Act. Those pages noted included Prime Video enrollment, Universal Prime Decision, Shipping Option Select, and Single Page Checkout.
As per the settlement, Amazon will have to make available a ‘clear and conspicuous’ alternative to opt out of Prime at the time of checkout and make it easier to cancel. “This settlement enables us to look to the future and continue to innovate for customers,” Amazon senior manager Mark Blafkin stated. “We strive to make signing up or canceling Prime clear and easy for customers while delivering significant value to millions of loyal members around the world.”
The settlement includes customers who signed up for Amazon Prime from June 23, 2019, to June 23, 2025. Customers who have only used three or fewer benefits within a year will be automatically paid up to $51. Others must submit claims, with Amazon obligated to notify eligible users within 30 days of automatic payments.
The fees are determined by the volume of Prime perks activated, such as two-day free shipping, Prime Video streaming, or Whole Foods shopping. The highest fee for a customer is $51.
Also Read: Amazon Accused of Tricking Customers into Prime Subscriptions, Set to Face Trial
This action is a clear indication of the increasing regulatory pressure on subscription services and dark patterns. Amazon is now obliged to facilitate the process of signing up and canceling for Prime.
This is a bid to win back consumer confidence, while preventing the loss of value and the millions of users that utilize the company’s platforms.