Amazon has agreed pay $2.5 billion to settle with the Federal Trade Commission (FTC) over allegations the e-commerce giant misled customers into signing up for Prime subscriptions and made it difficult to cancel, the agency announced Thursday.
The company will pay a $1 billion fine, in addition to providing $1.5 billion in refunds. The settlement comes just as a trial was getting underway in Seattle.
“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 Chair Andrew Ferguson said in a statement.
“[W]e are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again,” he added.
As part of the agreement, Amazon is required to offer a “clear and conspicuous” option for customers to decline Prime, as well as clearly disclosing the terms of a subscription. The company also must create a new method for cancelling that “cannot be difficult, costly, or time-consuming.”
The Hill has reached out to Amazon for comment.
The Prime case is one of two lawsuits Amazon faces from the FTC, which has separately accused it of maintaining an illegal monopoly.
