Amazon Agrees to $2.5B FTC Settlement Over Prime Membership Practices

Amazon (AMZN) has reached a $2.5 billion settlement with the Federal Trade Commission (FTC) to resolve allegations of deceptive Prime membership practices. The tech giant was accused of misleading users into enrolling without clear consent and obstructing cancellations. The settlement, announced just three days into trial proceedings, includes $1.5 billion in consumer refunds and $1 billion in civil penalties.

While maintaining its innocence, Amazon agreed to implement significant changes to its Prime subscription process. The company must now provide transparent terms during sign-up, obtain explicit consent before charging users, and simplify cancellation procedures. Two executives—Jamil Ghani and Neil Lindsay—are personally barred from future violations under the agreement.

The case originated from a June 2023 FTC complaint alleging widespread consumer harm. Notably, the settlement concludes under FTC Chairman Andrew Ferguson, a TRUMP administration appointee, marking a rare bipartisan enforcement action against big tech.