Under the terms announced on Thursday, $1.5 billion will be placed into a restitution fund for affected Prime subscribers, with individual consumers eligible to receive up to $51 if they file valid claims. The fund is expected to cover about 35 million people who were either enrolled in Prime unintentionally or faced barriers when attempting to cancel.
Although Amazon did not admit wrongdoing, the settlement imposes significant compliance measures. The e-commerce giant will now be required to introduce a clearly visible “decline” button during the signup process, simplify cancellation procedures, and provide clearer disclosures on subscription terms. An independent third-party monitor will also oversee Amazon’s adherence to the new standards.
The settlement was announced just days after the start of a federal trial in Seattle, where internal Amazon documents revealed company executives acknowledged concerns about so-called “subscription traps.” According to the FTC, the documents contained candid admissions such as “subscription driving is a bit of a shady world” and described manipulative enrollment tactics as “an unspoken cancer.”
FTC Chair Andrew Ferguson welcomed the outcome, saying the evidence showed 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.”
The case traces back to an investigation launched during the Trump administration and carried forward under President Joe Biden. With $1.5 billion in restitution, the agreement marks the second-largest consumer redress settlement in FTC history and reinforces the regulator’s tougher stance on major technology companies.
Amazon shares were largely unchanged following the announcement, and the company has yet to issue a detailed response.