The deal includes $1.5 billion in customer refunds and new rules to simplify cancellations, though analysts say Prime’s dominance remains unaffected.
Mudrayogi Desk : Amazon has agreed to pay $2.5 billion to settle allegations brought by the U.S. Federal Trade Commission (FTC) that it misled millions of customers into signing up for Prime memberships through manipulative design tactics known as “dark patterns.” The settlement, announced on Thursday, is among the largest ever secured by the FTC, covering both fines and customer restitution. Roughly $1 billion will be paid in penalties, while $1.5 billion will go to Prime subscribers who were either tricked into joining or faced hurdles in canceling their membership. According to Reuters, as many as 35 million people could qualify for refunds, with some automatically receiving $51.
The agreement requires Amazon to make its subscription practices more transparent, including clearer disclosures, more prominent opt-out options, simpler cancellation processes, and oversight by an independent monitor. Amazon, however, stressed that the settlement primarily formalizes changes it has already made, rather than imposing entirely new requirements.
The FTC’s complaint painted a starkly different picture, alleging that between 2017 and 2022 Amazon deliberately designed its sign-up and cancellation flows to nudge consumers toward Prime, rejecting proposed fixes until regulators intervened. The agency sued in 2023, accusing the company of making cancellation “near impossible.” Internal communications reportedly revealed Amazon employees acknowledging the misleading tactics, describing them as “a bit of a shady world” and even “an unspoken cancer.”
FTC Chair Andrew Ferguson hailed the deal as a “monumental win” against deceptive subscription practices, calling it the second-largest consumer restitution in the agency’s history. Former FTC Chair Lina Khan, who filed the original complaint, was more critical, dismissing the $2.5 billion payout as little more than “a drop in the bucket” for Amazon.
Despite the record settlement, Wall Street remained unfazed, with Amazon shares largely unaffected. The company, which generates around $2.5 billion in sales every 33 hours, continues to see Prime as one of its most profitable ventures. Since launching in 2005 at $79 a year, Prime has grown into a $139-a-year membership with tens of millions of subscribers. In the first half of 2025 alone, Amazon earned nearly $24 billion from subscription services.
Industry analysts believe the program’s dominance remains secure. “Amazon may have made Prime easier to cancel, but the program remains deeply entrenched in most American households,” eMarketer analyst Zak Stambor told Reuters.
For Amazon, the settlement may represent a costly but strategic move to put a high-profile legal battle behind it. For the FTC, it is a symbolic victory in its broader crackdown on Silicon Valley giants. And for Prime customers, it promises not only compensation but also a clearer path to opting out — even if most will likely choose to stay.
Mudrayogi Desk : Amazon has agreed to pay $2.5 billion to settle allegations brought by the U.S. Federal Trade Commission (FTC) that it misled millions of customers into signing up for Prime memberships through manipulative design tactics known as “dark patterns.” The settlement, announced on Thursday, is among the largest ever secured by the FTC, covering both fines and customer restitution. Roughly $1 billion will be paid in penalties, while $1.5 billion will go to Prime subscribers who were either tricked into joining or faced hurdles in canceling their membership. According to Reuters, as many as 35 million people could qualify for refunds, with some automatically receiving $51.
The agreement requires Amazon to make its subscription practices more transparent, including clearer disclosures, more prominent opt-out options, simpler cancellation processes, and oversight by an independent monitor. Amazon, however, stressed that the settlement primarily formalizes changes it has already made, rather than imposing entirely new requirements.
The FTC’s complaint painted a starkly different picture, alleging that between 2017 and 2022 Amazon deliberately designed its sign-up and cancellation flows to nudge consumers toward Prime, rejecting proposed fixes until regulators intervened. The agency sued in 2023, accusing the company of making cancellation “near impossible.” Internal communications reportedly revealed Amazon employees acknowledging the misleading tactics, describing them as “a bit of a shady world” and even “an unspoken cancer.”
FTC Chair Andrew Ferguson hailed the deal as a “monumental win” against deceptive subscription practices, calling it the second-largest consumer restitution in the agency’s history. Former FTC Chair Lina Khan, who filed the original complaint, was more critical, dismissing the $2.5 billion payout as little more than “a drop in the bucket” for Amazon.
Despite the record settlement, Wall Street remained unfazed, with Amazon shares largely unaffected. The company, which generates around $2.5 billion in sales every 33 hours, continues to see Prime as one of its most profitable ventures. Since launching in 2005 at $79 a year, Prime has grown into a $139-a-year membership with tens of millions of subscribers. In the first half of 2025 alone, Amazon earned nearly $24 billion from subscription services.
Industry analysts believe the program’s dominance remains secure. “Amazon may have made Prime easier to cancel, but the program remains deeply entrenched in most American households,” eMarketer analyst Zak Stambor told Reuters.
For Amazon, the settlement may represent a costly but strategic move to put a high-profile legal battle behind it. For the FTC, it is a symbolic victory in its broader crackdown on Silicon Valley giants. And for Prime customers, it promises not only compensation but also a clearer path to opting out — even if most will likely choose to stay.
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