The Federal Trade Commission (FTC) has reached a $2.5 billion settlement with Amazon over what it calls “deceptive” Prime subscription practices.
Of that amount, $1.5 billion will be set aside for refunds to millions of customers who were either signed up for Prime without their consent or found it nearly impossible to cancel, according to the FTC.
The complaint was first filed in 2023 and was scheduled to go to trial just two days ago, where a jury would have determined whether Amazon misled its customers, NPR reports. Instead, the case has been resolved through a settlement.
“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,” FTC Chairman Andrew N. Ferguson said. Internal documents revealed Amazon executives acknowledged the issues, with remarks such as “subscription driving is a bit of a shady world” and describing unwanted sign-ups as “an unspoken cancer.”
Two senior Amazon executives, senior vice president Neil Lindsay and vice president Jamil Ghani, were charged in connection with the scheme.
As part of the settlement, Amazon must implement “meaningful changes” to its Prime enrollment and cancellation process. That includes adding a clear, straightforward button for declining Prime, replacing the less direct option that previously read, “No, I don’t want Free Shipping.”
Author: shadjavist
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