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Amazon to pay $2.5 billion for allegedly duping millions to sign up for Prime
While a win for consumers and the US FTC, the settlement is relatively painless for Amazon, which makes $2.5 billion in sales every 33 hours.
Amazon.com Inc. will pay $2.5 billion in fines and reimbursements to people it allegedly duped to sign up for Prime memberships.
While a win for consumers and the US Federal Trade Commission (FTC), the settlement is relatively painless for Amazon, which makes $2.5 billion in sales every 33 hours. Its shares were nearly unchanged after the news.
Around 35 million Amazon Prime customers will be eligible for payout from a $1.5 billion fund, the FTC said. Amazon will pay $1 billion in fines to the FTC. Customers who signed up for Prime between 23 June 2019 and 23 June 2025 through certain offers — and who used few Prime benefits afterwards — will automatically receive $51, according to court documents.
The settlement also allows customers to submit claims for payment if they tried to cancel Prime and failed during that time.
Amazon did not admit wrongdoing as part of the settlement, and said in a statement that the deal allows it to move forward and focus on 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 has agreed to create a “clear and conspicuous” button to allow customers to decline a Prime subscription, and to make it easier to cancel. Amazon has also agreed to more clearly disclose the terms of a subscription during enrolment and pay an independent supervisor to monitor compliance.
Lina Khan, the former FTC chair who filed the case, called the $2.5 billion settlement “a drop in the bucket for Amazon and, no doubt, a big relief for the executives who knowingly harmed their customers”, in a post on X, formerly Twitter.
The US FTC started probing Amazon's subscription practices during President Donald Trump's first term and the case was filed during Joe Biden's tenure.
Amazon Prime History
Amazon founder Jeff Bezos once said he wanted to make Prime so compelling that consumers would feel they are “being irresponsible” if they are not members.
Amazon introduced Prime in 2005 for $79 per year and has steadily increased subscription fees, most recently to $139 in 2022. The programme helped drive $23.9 billion in subscription revenue in the first half of 2025, making it a key growth driver for the company.
Amazon drove those recruits, the US FTC said, by offering free trials on its website using pitches such as: “Get FREE Same-Day Delivery”.
But the FTC said Amazon had failed to clearly disclose to customers that selecting that option would enrol them in Prime and eventually result in monthly subscription charges.
While Amazon has agreed to change some of its practices as part of the settlement, investors do not believe those changes will dent Prime's appeal. “Amazon may have made Prime easier to cancel, but the program remains deeply entrenched in most American households,” eMarketer analyst Zak Stambor said.
