Amazon, the world’s largest online retailer, has agreed to pay a staggering $2.5 billion to settle a lawsuit brought by the Federal Trade Commission (FTC) over allegations that it misled millions of customers into signing up for its popular Prime subscription service and then made the process to cancel that subscription unnecessarily difficult. The settlement, announced on September 25, 2025, comes just days into a high-profile trial in Seattle federal court, and it’s already being called one of the most significant consumer protection victories in FTC history.
According to CNBC, the lawsuit originated in June 2023, when the FTC, under the Biden administration, accused Amazon of enrolling tens of millions of consumers in Prime memberships without their clear consent. The agency further alleged that Amazon used so-called “dark patterns”—deceptive and manipulative design choices—to nudge users toward subscription and then constructed obstacles to prevent easy cancellation. The FTC’s complaint described the cancellation process internally dubbed "Iliad," a reference to the epic Greek poem about a protracted siege, because customers had to affirm their intent to cancel across three separate pages.
Amazon Prime, launched in 2005, now boasts over 200 million members worldwide and is a cornerstone of Amazon’s business, offering perks like free shipping and streaming content for $139 a year. Data cited by Fox Business shows that Prime members spend more and shop more frequently than non-members, making the program a lucrative engine for the company. But the FTC’s investigation, which began in 2021, revealed that many customers were enrolled without realizing it, and others found themselves trapped in a subscription they couldn’t easily escape.
The FTC’s lawsuit was not just about the money. It was about holding one of the world’s most powerful companies accountable for practices that, according to the agency, undermined consumer choice and transparency. FTC Chairman Andrew N. Ferguson didn’t mince words: “Today, the Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.” Ferguson continued, “The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription.”
For Amazon, the settlement is a way to put the controversy behind it without admitting any wrongdoing. In a statement quoted by Fox Business and Asheville Citizen Times, Amazon spokesperson Mark Blafkin said, “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.”
The terms of the settlement are sweeping. Amazon will pay $1 billion in civil penalties and $1.5 billion in consumer relief, with roughly 35 million customers eligible for refunds—some automatically receiving up to $51 within 90 days, while others will need to submit a claim. Information on how to file a claim will be made available on the FTC’s website, according to Asheville Citizen Times. The company must also overhaul its subscription interface, ensuring a clear and conspicuous button to decline Prime, removing confusing language like “No, I don’t want Free Shipping,” and providing full disclosure of all costs, charges, and cancellation procedures. Perhaps most importantly, Amazon is now required to make it just as easy to cancel Prime as it is to sign up, and an independent, third-party supervisor will monitor compliance.
In addition, the settlement specifically prohibits Amazon from misrepresenting the terms of Prime and requires the company to obtain explicit consent before charging consumers for a subscription. Two senior Amazon executives, Jamil Ghani and Neil Lindsay, are also barred from engaging in any unlawful conduct related to subscriptions, as noted by CNBC.
Not everyone is satisfied with the outcome. Senator Elizabeth Warren, a longtime consumer advocate, criticized the settlement as insufficient, telling Fox Business, “Amazon allegedly tricked people into signing up for Prime and then trapped them with a monthly subscription by making it next to impossible to cancel. This settlement fails to hold Amazon executives accountable for their actions and the fine is effectively a slap on the wrist—it’s less than 1-percent of Amazon’s revenue last year.” Warren argued that when penalties are so small relative to a company’s size, they risk becoming just another cost of doing business, rather than a true deterrent.
The size of the penalty is indeed notable but not unprecedented. For context, the FTC imposed a $5 billion fine on Facebook (now Meta) in 2019 for privacy violations. Amazon’s $2.5 billion settlement, while massive, represents only about 0.1% of the company’s current market capitalization, which hovers near $2.4 trillion. Still, as CNBC and Fox Business point out, it stands as one of the largest consumer protection settlements in U.S. history and a clear warning shot to other tech giants about the risks of deceptive subscription practices.
What does this mean for customers, especially the estimated 35 million who were affected? For one, they can expect to see refunds soon, with automatic payments going out to some and a claims process opening for others. The FTC and consumer advocates like PIRG have also offered advice for those struggling to cancel subscriptions: use credit cards instead of debit cards, keep records of all communications, watch for pre-checked boxes, and don’t hesitate to file complaints with the FTC or state attorneys general if problems persist.
Amazon, for its part, claims many of the changes required by the settlement were already instituted in recent years. The company insists it is committed to transparency and customer satisfaction, but the FTC’s findings—and the rapid decision to settle just days into the trial—suggest otherwise. As Chris Mufarrige, director of the FTC Bureau of Consumer Protection, told Fox TV, “I think it just took a few days for them to see that they were going to lose. And they came to us and they paid out.”
This isn’t the end of Amazon’s legal troubles. The company still faces a broader antitrust case brought by the FTC and attorneys general from 17 states, accusing it of using monopoly power to inflate prices and stifle competition. That trial is set for 2027, promising more scrutiny of Amazon’s market dominance and business practices.
For now, though, the $2.5 billion settlement marks a significant milestone in the ongoing debate over consumer rights in the digital age. It’s a reminder that even the biggest players can be held to account when regulators and the public demand greater transparency and fairness.
