Amazon's Record $2.5B FTC Settlement Over Deceptive Prime Practices
Amazon has agreed to a record-breaking settlement of $2.5 billion with the Federal Trade Commission (FTC) over allegations of deceptive practices in enrolling customers for Prime memberships. The settlement, which includes a $1 billion civil penalty, is the largest in FTC history.
The FTC complaint, filed in 2023 under former Chair Lina Khan, accused Amazon of making it difficult for customers to purchase items without also subscribing to Prime. The company's process for canceling Prime subscriptions was often too complicated, according to the complaint.
As part of the settlement, Amazon is prohibited from misrepresenting the terms of subscriptions and must use a clear cancellation process. The company will also set up a claims process for more than 30 million customers who may have been affected by the case. Certain customers who are eligible for automatic refunds of up to $51 will be reimbursed within 90 days of the settlement order. Some of the settlement money - $1.5 billion - will be refunded to customers who were impacted by Amazon's actions.
The settlement marks a significant victory for the FTC in its efforts to protect consumers from deceptive practices. Amazon's actions, which included deliberately making it difficult for customers to avoid subscribing to Prime, have resulted in a substantial penalty and refunds for affected customers.
