Amazon $2.5B FTC Prime Settlement: Essential Update for U.S. Shoppers

Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC) resolving allegations that it misled millions of customers into subscribing to its Prime service and made it difficult for them to cancel. The settlement requires Amazon to pay a $1 billion civil penalty and return $1.5 billion to affected subscribers. This marks one of the largest consumer protection settlements in recent years, highlighting the FTC’s increased scrutiny of subscription-based services.

The case stemmed from complaints that Amazon used deceptive tactics to enroll users in Prime, often without clear consent, and created hurdles to cancel memberships. Under the terms of the agreement, Amazon must also improve transparency around Prime’s enrollment and cancellation processes to prevent future abuses. Consumers who believe they were charged improperly may be eligible for refunds as part of the restitution fund.

Why It Matters: This settlement underscores the growing regulatory focus on subscription practices affecting millions of Americans, ensuring companies like Amazon prioritize clear consent and fair cancellation policies. It also potentially paves the way for stronger consumer protections across digital services in the U.S.

Source: Original Article on The Verge