The Federal Trade Commission has secured a settlement with Amazon over Prime subscription dark patterns that made it difficult for consumers to cancel their memberships.
Amazon has agreed to pay $2.5 billion to settle a lawsuit alleging it misled customers into paying for Prime subscriptions, the Federal Trade Commission announced Thursday. The announcement came days into a trial between the tech giant and the FTC.
Under the terms of the settlement, Amazon will be required to pay a $1 billion civil penalty, provide $1.5 billion in refunds to consumers, and cease any unlawful enrollment and cancellation practices for Prime. The settlement figure is less than 1% of Amazon's revenue last year. AMAZON PRIME MEMBERS BRACE FOR STICKER SHOCK AS ANALYSTS PREDICT IMMINENT PRICE HIKE "Today, the Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel," said FTC Chairman Andrew N. Ferguson. "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." Sen. Elizabeth Warren, D-Mass., who has long advocated for consumer rights, criticized the settlement, saying the Trump administration failed to hold Amazon accountable. "Amazon allegedly tricked people into signing up for Prime and then trapped them with a monthly subscription by making it next to impossible to cancel," Warren said in a statement. "This settlement fails to hold Amazon executives accountable for their actions and the fine is effectively a slap on the wrist – it’s less than 1-percent of Amazon’s revenue last year." "When the government does not fight for real accountability, giant corporations like Amazon treat fines for potentially illegal conduct as just the cost of doing business and it risks incentivizing future lawbreaking that costs people money," she added. The lawsuit, filed in 2023, alleged that Amazon duped users into subscribing to Prime by using what are called "dark patterns." Dark patterns are design choices that customers see on screen, deliberately created to mislead or trick them into taking actions they might not have taken willingly or without fully understanding the consequences. AMAZON ANNOUNCES $20B INVESTMENT IN RURAL PENNSYLVANIA FOR AI DATA CENTERS In addition, the company made the cancellation process difficult by delaying or completely rejecting changes that would have made the process much easier for people. In a statement, Amazon spokesperson Mark Blafkin said the company and its executives have "always followed the law, and this settlement allows us to move forward and focus on innovating for customers." "We work incredibly hard to make it clear and simple for customers to both sign up for or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world," he added. "We will continue to do so, and look forward to what we deliver for Prime members in the coming years." GET FOX BUSINESS ON THE GO BY CLICKING HERE Amazon also faces another lawsuit from the FTC, in which it is accused of operating as a monopoly. That trial, which will be presided over by the same judge as the Prime case, is set to begin in 2027.
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