In a milestone enforcement action, the FTC has secured a $2.5 billion settlement with Amazon over misleading subscription practices enrolling consumers into Prime without clear consent and making cancellation unnecessarily difficult.

What Happened

• The FTC imposed a $1 billion civil penalty — the largest ever associated with a violation of an FTC rule.
• In addition, Amazon must provide $1.5 billion in consumer refunds to as many as 35 million affected customers.
• Eligible consumers can receive up to $51 each for unwanted enrollments or failed cancellation attempts. 

This settlement resolves charges Amazon violated both the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) by using manipulative interface designs (so-called “dark patterns”) and creating unnecessary hurdles if a Prime member wanted to cancel. 

How Amazon Is Said to Have Broken the Rules

According to the FTC, Amazon’s site design nudged or tricked users into Prime enrollment by:

• Displaying checkout buttons that didn’t clearly indicate Prime subscription
• Obtaining billing information before revealing key terms (cost, auto-renew, cancellation)
• Making the “opt out” or “decline Prime” option subtle or ambiguously phrased (e.g., “No, I don’t want Free Shipping”) 

Once users were enrolled, Amazon allegedly made the cancellation process difficult by:

• Requiring multiple steps and confusing navigation (four pages, 15 options in some versions)
• Embedding “Save this subscription” offers or partial opt-outs mid cancellation flows
• Delaying or resisting internal changes that would simplify cancellation because they could hurt revenue 

Internal Amazon communications uncovered during the FTC’s investigation reportedly included statements such as “subscription driving is a bit of a shady world” and referring to unwanted enrollments as an “unspoken cancer.” 

What the Settlement Requires Amazon to Do

To resolve the case, Amazon must undertake a series of reforms:

• Add a clear, noticeable “Decline Prime” button (no more ambiguous wording)
• Fully disclose all material terms (price, billing frequency, auto-renewal, cancellation options) during enrollment
• Allow cancellation through the same method used to sign up, without cost or excessive steps
• Employ a third-party supervisor to oversee compliance and the distribution of refunds 
• Automatically issue refunds where feasible and establish a claims process for others 

Amazon, in its official statement, claimed it “always followed the law” and viewed settlement as a path to move forward without protracted litigation. 

Who Is Eligible, and What Happens Next?

To qualify, individuals must meet certain criteria:

• Eligible consumers include U.S. residents who either 1) signed up for Prime through one of Amazon’s “Challenged Enrollment Flows,” or 2) tried but failed to cancel Prime between June 23, 2019 and June 23, 2025
• Automatic refunds: Consumers who enrolled through a challenged flow and used no more than three Prime benefits in any 12-month period will automatically receive a refund up to $51 – without needing to file a claim. Payments must be distributed within 90 days of the court order.
• Claims process: Consumers who used between 4 and 10 Prime benefits during that same period can file a claim to request reimbursement. They will receive notice by email or mail and have 180 days to submit the form.
• Timing: After automatic payments conclude, Amazon will notify eligible consumers about how to file claims. The FTC-appointed claims administrator will oversee the process to ensure compliance.

Refunds are expected to be distributed within 90 days following the court order. 

Broader Implications: Subscription Models Under Scrutiny

This ruling has implications well beyond Amazon. It highlights:

• Heightened regulatory focus on subscription traps, dark patterns, and cancellation obfuscation
• Any company relying on automatic renewals or recurring billing may need to redesign user flows for transparency and ease
• A precedent that consumer goods, digital services, and SaaS firms must err on the side of clarity, user control, and consent.

For Amazon specifically, this settlement puts a spotlight on user experience, consent-first design, and accountability. We'll continue to keep you posted as this develops.

As always, please reach out to Certificate Clearing to learn more about how we simplify the claim filing process.