Amazon to Pay Record 2.5 Billion Dollar FTC Settlement Over Prime Subscription Practices Amazon has agreed to a historic 2.5 billion dollar settlement with the Federal Trade Commission to resolve a case centered on the company’s Prime subscription service. The FTC accused Amazon of using deceptive designs to enroll consumers into Prime without their clear consent and then creating unnecessary obstacles for those trying to cancel their memberships. The settlement, stemming from a lawsuit filed in 2023, includes a 1 billion dollar civil penalty, which the FTC states is the largest ever for a violation of its rules. An additional 1.5 billion dollars is allocated for customer refunds. The agency said this consumer redress fund will provide full relief for an estimated 35 million people who were impacted by unwanted Prime enrollments or found the cancellation process deliberately difficult. As part of the agreement, Amazon must change its Prime enrollment and cancellation procedures. The company is now prohibited from using certain dark patterns, which are deceptive user interface designs intended to manipulate user choices. A specific example cited by the FTC is a button that read, No, I don’t want Free Shipping, which was presented to users attempting to cancel. The settlement mandates that Amazon must instead provide a clear and obvious button for customers to decline the Prime membership. Amazon will also be required to present clearer information to consumers during the sign-up process. This includes explicitly stating the subscription price, its auto-renewal nature, and providing straightforward instructions on how to cancel the service. In a statement, an Amazon spokesperson said, Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers. The spokesperson added that the company works hard to make signing up for or canceling Prime clear and simple, and that the settlement does not include an admission of guilt from Amazon. The FTC noted that the 1.5 billion dollar consumer redress is the second-highest restitution award it has ever obtained.
