Amazon has agreed to a landmark $2.5 billion settlement with the Federal Trade Commission (FTC) over allegations that it misled consumers into signing up for Prime memberships and made the cancellation process unnecessarily difficult. The settlement includes a $1 billion civil penalty—the largest in FTC history for a rule violation—and $1.5 billion in refunds to affected customers. The case centered on the 2010 Restore Online Shoppers’ Confidence Act. According to the FTC, Amazon’s practices violated this law, and the company opted to settle shortly after the trial began, sensing a likely defeat.
Although Amazon denied any wrongdoing, it agreed to the settlement to avoid prolonged litigation. Affected Prime users, including those who signed up through the “Single Page Checkout” between June 2019 and June 2025, will receive up to $51 in automatic refunds within 90 days. Additionally, a claims process will be set up for over 30 million customers.
The FTC alleged Amazon used deceptive interfaces and deliberately complicated cancellation steps, internally dubbed “Iliad.” As part of the settlement, Amazon must clearly disclose subscription terms, secure explicit customer consent, and ensure cancellations are simple and straightforward.
