Amazon to Pay Billions Over Allegations It Tricked Millions Into Prime Subscriptions

Court Magazine
Sep 25, 2025
2 min read

SEATTLE — In a sweeping settlement that marks one of the largest consumer protection payouts in U.S. history, Amazon has agreed to pay $2.5 billion to resolve federal allegations that it deceptively enrolled millions of customers into its Prime subscription service and made cancellation intentionally difficult.

The settlement, announced Thursday by the Federal Trade Commission (FTC), includes $1 billion in civil penalties and $1.5 billion in customer refunds. It follows a two-year investigation into Amazon’s use of so-called “dark patterns”—design tactics that manipulate users into making unintended choices.

A Subscription Built on Confusion

At the heart of the FTC’s case was a simple question: Did Amazon make it too easy to sign up for Prime—and too hard to leave?

According to internal documents obtained during the investigation, Amazon’s checkout flow often included ambiguous prompts, pre-selected options, and buried disclosures that led users to enroll in Prime without realizing it. Once subscribed, customers faced a labyrinthine cancellation process involving multiple screens, misleading language, and hidden buttons.

“Amazon’s Prime enrollment practices were not just aggressive—they were deceptive,” said FTC Chair Andrew Ferguson. “This settlement sends a clear message: No company is above transparency.”

Internal Whistleblowers Sounded the Alarm

The FTC’s case was bolstered by testimony from former Amazon employees, who described internal concerns dating back to 2021. One product manager referred to the Prime sign-up flow as “a conversion trap,” while another called the cancellation process “a deliberate friction funnel.”

Emails revealed that Amazon executives were aware of the confusion but resisted changes that might reduce Prime enrollment rates. “We know it’s misleading,” one senior engineer wrote, “but it’s profitable.”

Who Gets Paid—and How

The $1.5 billion refund pool will be distributed to an estimated 35 million Prime users who:

Were enrolled through deceptive prompts
Attempted to cancel but were unsuccessful
Used fewer than three Prime benefits in the first year

Eligible customers will receive automatic refunds averaging $51, with additional claims available through a forthcoming FTC portal.

Amazon’s Response: No Admission, But Major Changes

Amazon did not admit wrongdoing but agreed to overhaul its subscription practices. The company will:

Add a clear opt-out button during checkout
Simplify cancellation to match the ease of enrollment
Disclose subscription terms, renewal dates, and charges upfront
Fund an independent compliance monitor for three years

In a statement, Amazon said the settlement “allows us to move forward and focus on delivering value to our customers.”

A Broader Reckoning for Big Tech

The case against Amazon is part of a growing push by regulators to rein in manipulative design practices across the tech industry. The FTC has launched similar investigations into Google, Meta, and TikTok, focusing on subscription models, data consent, and user interface manipulation.

Consumer advocates hailed the Amazon settlement as a watershed moment.

“This is a win for transparency, accountability, and every consumer who’s ever clicked ‘cancel’ and wondered if it actually worked,” said Maya Patel, director of the Digital Rights Coalition.