Amazon has reached a $2.5 billion settlement with the Federal Trade Commission to settle allegations that the tech giant enrolled millions of consumers in its Prime subscriptions without their consent and knowingly made it difficult for consumers to cancel.
The company will pay a $1 billion civil penalty and provide $1.5 billion in refunds back to consumers. The settlement also requires that Amazon make changes to its enrollment and cancellation practices, including:
- A clear and conspicuous button for customers to decline Prime. Amazon can no longer have a button that says, “No, I don’t want Free Shipping.”
- Clear and conspicuous disclosures about all material terms of Prime during the Prime enrollment process, such as the cost, the date and frequency of charges to consumers, whether the subscription auto-renews, and cancellation procedures.
- An easy way for consumers to cancel Prime, using the same method that consumers used to sign up
- Paying for an independent, third-party supervisor to monitor Amazon’s compliance with the consumer redress distribution process
“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,” FTC Chairman Andrew Ferguson said in a statement. “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. Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again. The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”
More to come…
