Amazon to Pay $2.5 Billion in FTC Settlement Over Prime Enrollment Practices
WASHINGTON, D.C. — Amazon has agreed to a landmark $2.5 billion settlement with the Federal Trade Commission (FTC) following allegations that the company engaged in deceptive practices related to its Amazon Prime enrollment and cancellation processes. The settlement, announced on January 31, 2026, addresses claims that Amazon enrolled millions of consumers without clear consent and made it unduly difficult to cancel memberships.
Federal Trade Commission Chairman Andrew N. Ferguson stated, “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.” Instead of proceeding to trial, Amazon opted to settle the case without admitting liability, asserting that it has already implemented changes to simplify Prime signups and cancellations.
The settlement consists of two main components: a $1 billion civil penalty paid to the federal government and $1.5 billion allocated for consumer refunds. This civil penalty marks the largest ever imposed by the FTC for a violation of its rules. Eligible U.S.-based Amazon Prime subscribers may claim refunds for membership fees paid during the covered period, with individual refunds capped at $51.
Consumers who believe they may qualify for a refund should note that only Prime members residing in the United States are eligible. The FTC has established a claims process to facilitate reimbursement, and further details can be found on the official Federal Trade Commission website. This action underscores the FTC’s ongoing commitment to protecting consumers from unfair and deceptive subscription practices.
Amazon’s settlement follows increased regulatory scrutiny of subscription services and digital marketplaces. The Consumer Financial Protection Bureau and other agencies have also been active in ensuring transparency and fairness in subscription-based offerings.
Industry analysts note that this settlement may prompt other companies to review their subscription enrollment and cancellation procedures to avoid similar penalties. The case serves as a reminder of the importance of clear consumer consent and straightforward cancellation options in subscription services.
For further information on consumer rights and how to file a claim, customers are encouraged to visit the FTC’s dedicated settlement page and consult resources available through the USA.gov consumer complaints portal. Additionally, the FTC press releases provide ongoing updates on enforcement actions and consumer protection initiatives.
As digital subscriptions continue to proliferate, this settlement highlights the vital role of federal oversight in safeguarding consumers from potentially manipulative business practices.
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