Amazon will pay a record civil penalty to settle a case with the Federal Trade Commission. The agency accused Amazon of tricking consumers into signing up for a Prime membership without their consent and making it hard for customers to cancel in a lawsuit filed in 2023.
To settle the charges, Amazon has agreed to pay a $1 billion civil penalty and $1.5 billion to refund customers. The company also agreed to “ease unlawful enrollment and cancellation practices for Prime,” per the FTC.
The agency says the civil penalty is the largest ever for a case involving a breach of its rules — it had accused Amazon of violating the FTC Act and the Restore Online Shoppers’ Confidence Act. The $1.5 billion in consumer redress will provide “full relief for the estimated 35 million consumers impacted by unwanted Prime enrollment or deferred cancellation,” the FTC said. It added that this is the second-highest restitution award it has ever obtained.
Moreover, Amazon will be prohibited from using some of the dark patterns (i.e. deceptive design practices) it has employed to dissuade customers from canceling Prime memberships. For instance, the settlement precludes it from displaying a button that reads, “No, I don’t want Free Shipping” during the cancellation flow. Instead, it will have to show a “a clear and conspicuous button for customers to decline Prime,” per the terms of the settlement, which does not include an admission of guilt on Amazon’s part.
The company will also have to provide clearer information about a Prime subscription to consumers during the sign-up process. This will include details about the price, whether the subscription auto-renews and how to cancel.
“Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers,” Amazon spokesperson Mark Blafkin said in a statement provided to Tech Reader. “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world. We will continue to do so, and look forward to what we’ll deliver for Prime members in the coming years.”
Update September 25, 1:47PM ET: Added Amazon’s statement and clarified that the settlement doesn’t include an admission of guilt.
