The Federal Trade Commission reached a record $2.5 billion settlement with Amazon and executives Neil Lindsay and Jamil Ghani, resolving allegations that the company tricked millions into Prime subscriptions and made cancellations unnecessarily difficult.
Settlement details:
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$1B civil penalty — the largest ever for an FTC rule violation.
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$1.5B in refunds — compensating ~35M affected consumers.
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Amazon must end deceptive enrollment and cancellation practices.
Required changes:
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Clear, visible option to decline Prime (no more “No, I don’t want free shipping” traps).
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Upfront disclosure of Prime’s cost, auto-renewal, billing, and cancellation terms.
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Simple, streamlined cancellation using the same method as sign-up.
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Oversight by an independent third-party to ensure compliance.
FTC Chair Andrew N. Ferguson called it a “monumental win” against subscription traps that “cheat ordinary Americans out of their hard-earned pay.”
Amazon has 90 days to issue $51 payments to eligible customers who were misled into Prime sign-ups. To qualify, users must meet specific criteria—such as having used 10 or fewer Prime benefits within any 12-month period of their subscription.
They will also notify additional customers that they may file a claim if they believe they were unintentionally enrolled in Prime or persuaded to stay by cancellation offers.
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