Amazon settles with FTC over 'deceptive' Prime signups

Core Viewpoint - Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC) over allegations of deceptive practices related to its Prime subscription service, affecting nearly 40 million customers [1][2]. Settlement Details - The settlement includes a $1 billion civil penalty and $1.5 billion in consumer refunds, marking the second-largest restitution amount ever obtained by the FTC [2][3]. - The FTC described the settlement as a "record-breaking, monumental win" for consumers facing deceptive subscription practices [3]. Allegations and Customer Experience - The FTC's lawsuit, filed two years ago, accused Amazon of creating a "labyrinthine" cancellation process that deterred customers from canceling their Prime subscriptions [3]. - Customers were reportedly required to navigate a complex cancellation process involving four pages, six clicks, and fifteen options, with warnings about missing deals to discourage cancellations [3]. Changes in Policies - Following the FTC's actions, Amazon has revised its cancellation policies, introducing a standalone cancellation page that clearly outlines options for pausing or ending memberships [4]. - The settlement mandates that Amazon provide a clear button for customers to decline Prime, eliminating misleading options such as "No, I don't want Free Shipping" [4]. - An independent third-party supervisor will be appointed to monitor Amazon's compliance with the settlement terms [4]. Subscriber Insights - Amazon's Prime subscriber base is estimated to exceed 200 million, with Prime customers generally spending more than non-subscribers, making them more valuable to the company [5]. - This lawsuit is distinct from the FTC's ongoing antitrust case against Amazon, which is scheduled for trial in 2027 [5].