Amazon’s $2.5B FTC Settlement Over Prime Targets 35M Users

- Amazon to pay $2.5 billion over FTC allegations of deceptive Prime subscription practices - Settlement includes a $1 billion penalty and $1.5 billion in refunds for 35 million customers On September 25, 2025, media outlets reported that Amazon agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC). The payment resolves a lawsuit accusing the company of deceptive practices related to its Prime subscription service. The settlement, filed in Seattle, includes $1 billion in civil penalties and $1.5 billion in customer refunds. Approximately 35 million affected customers will receive an average refund of $51 each. The FTC accused Amazon of manipulating consumers with "sophisticated subscription traps." The agency alleged the company intentionally made it difficult for users to cancel Prime memberships and used misleading user experiences to enroll people unintentionally. While Amazon denied any wrongdoing, it agreed to new compliance measures under the settlement. As a result, the company must now clearly present Prime’s subscription terms, obtain explicit consent before charging customers, and implement a simple cancellation process. The enforcement action also named two Amazon executives, Jamil Ghani and Neil Lindsay, and the settlement prohibits them from engaging in illegal conduct related to Prime. According to the FTC, this is one of its largest penalties to date. For comparison, the agency’s previous record was a $5 billion fine against Meta in 2019 for privacy violations. Despite its magnitude, the $2.5 billion penalty represents less than 0.1% of Amazon’s $2.4 trillion market valuation. However, this settlement does not resolve all legal challenges Amazon currently faces with the FTC. The company remains embroiled in a separate antitrust lawsuit. Filed by the FTC alongside 17 state attorneys general, the suit accuses Amazon of abusing market power to eliminate competition and inflate prices. That case is set to proceed in 2027.