FTC Wins Record $2.5 Billion Amazon Prime Settlement

Amazon Prime $2.5 Billion FTC Settlement Ends “Unspoken Cancer” of Deceptive Subscriptions.Amazon has agreed to a landmark $2.5 billion settlement with the Federal Trade Commission. The agreement resolves charges that the tech giant used deceptive tactics to enroll consumers in Amazon Prime. The FTC announced the settlement on Thursday, September 25, 2025.The settlement includes a record $1 billion civil penalty. It also mandates $1.5 billion in consumer refunds. An estimated 35 million people were affected by the alleged practices.

Inside the FTC’s Case Against Amazon

The FTC charged Amazon and two senior executives, Neil Lindsay and Jamil Ghani. The charges included violations of the FTC Act and the Restore Online Shoppers’ Confidence Act. According to the agency, Amazon used confusing user interfaces to trick customers.Internal documents revealed during the investigation were damning. One comment referred to “subscription driving” as a “shady world.” Another called the practice of leading consumers to unwanted subscriptions an “unspoken cancer.” This evidence showed executives were aware of the problematic methods.

Mandated Changes to Prime Enrollment and Cancellation

The stipulated final order requires Amazon to overhaul its practices. These changes are designed to protect consumers from similar issues in the future. The new rules are specific and binding.Amazon must now provide a clear button for customers to decline Prime. It must replace ambiguous options like “No, I don’t want Free Shipping.” The company is also required to give full disclosure of all Prime terms during enrollment. This includes clear information on cost and billing frequency.Most importantly, cancellation must be made simple. Consumers must be able to cancel using the same method they used to sign up. The process cannot be difficult, costly, or time-consuming.

A Monumental Win for Consumer Protection

FTC Chairman Andrew N. Ferguson hailed the settlement as a historic victory. He stated it was a win for millions of Americans tired of deceptive subscriptions. The evidence, he said, showed Amazon used sophisticated traps.The Commission voted 3-0 to approve the settlement. The order was filed in the U.S. District Court for the Western District of Washington. An independent supervisor will monitor the distribution of consumer refunds.

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This $2.5 billion Amazon Prime settlement sets a powerful new precedent for holding corporations accountable. It signals a major shift in how regulators will police deceptive online subscription practices, ensuring transparency becomes the new standard.

Info at your fingertips-

What is the Amazon Prime settlement about?

The settlement resolves FTC allegations that Amazon used deceptive designs to enroll people in Prime without clear consent. It also addresses claims the company made cancellation unnecessarily difficult for millions of subscribers.

How much money will consumers receive from the settlement?

The total settlement is $2.5 billion. Of that, $1.5 billion is allocated for consumer refunds. An independent supervisor will manage the distribution process to eligible claimants.

What changes is Amazon required to make?

Amazon must simplify its Prime sign-up and cancellation flows. This includes adding a clear “no” button, disclosing all terms upfront, and ensuring cancellation is as easy as enrollment.

When will these changes to Amazon Prime take effect?

The changes are mandated by the court-approved final order. Amazon must implement them promptly, though the exact timeline for full rollout has not been publicly specified.

Who were the executives named in the FTC’s complaint?

The FTC charged Senior Vice President Neil Lindsay and Vice President Jamil Ghani alongside the company. The complaint alleged their involvement in the practices that led to the settlement.