What We Know About Amazon’s $2.5 Billion Settlement

Court documents say that $1.5 billion will go directly to Prime subscribers, which will be capped at $51 per customer.

An Amazon company logo marks the facade of a building, in Schoenefeld near Berlin, on March 18, 2022. Michael Sohn/AP Photo

Amazon will pay $2.5 billion in penalties and refunds as part of a settlement against allegations that it enrolled its customers in the Prime service without their consent, federal officials said in a Sept. 25 statement.

It means that some Amazon customers who were or are enrolled in Prime will qualify for a payment. Of the $2.5 billion amount, $1.5 billion will go directly to Prime subscribers, which will be capped at $51 per customer. The other $1 billion will be paid as a civil penalty by the company, the Federal Trade Commission (FTC) said.

The payout and settlement are in response to a 2023 lawsuit filed by the FTC against Amazon in June 2023 that alleged the company deceived tens of millions of Amazon customers into signing up for Prime before disrupting customers’ attempts to cancel the service.

Amazon has denied the FTC claims, saying that it is settling with the government to focus on its customers.

Who Is Eligible for a Settlement Payment?

Certain Prime customers who are eligible for automatic refunds of up to $51 include those who may have signed up for a membership via the company’s “Single Page Checkout,” among other links, between June 23, 2019, to June 23, 2025. Those customers will be reimbursed within 90 days of the settlement order.

Amazon is also on the hook to set up a claims process for more than 30 million customers who may have been affected by the other issues at the heart of the FTC case, including its cancellation process.

Specifically, customers are only eligible for the settlement payment if they unsuccessfully tried to cancel their Prime subscription or if they signed up for Prime via what the court records called a “challenged enrollment flow.”

The flow refers to a subscription that started through pages on Amazon’s website such as the “Universal Prime Decision Page, the Shipping Option Select Page, Prime Video enrollment flow, or the Single Page Checkout,” according to the court papers.

Amazon Denies Wrongdoing

After the settlement was reached, Amazon said in a Sept. 25 statement that the settlement was hashed out in order to move on.

“Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers. We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world,” Amazon said.

“We will continue to do so, and look forward to what we’ll deliver for Prime members in the coming years.”

What the FTC Alleged

The agency said that Amazon deceived tens of millions of customers into signing up for a Prime subscription and violating several laws.

“Amazon created confusing and deceptive user interfaces to lead consumers to enroll in Prime without their knowledge,” the agency said in a Sept. 25 statement, adding that it further “created a complex and difficult process for consumers seeking to cancel their Prime subscription, with the goal of preventing consumers from cancelling Prime.”

Documents that were produced ahead of the trial also indicated that company employees and executives had discussed the cancellation and enrollment problems, the FTC said.

The FTC said that the settlement mandates that Amazon “make meaningful changes to the Prime enrollment and cancellation flows,” such as including “a clear and conspicuous button for customers to decline Prime,” among other changes to its website.