Amazon Agrees To Pay $2.5 Billion In FTC Settlement Of Claims Of Unauthorized Enrollment In Prime Memberships

Core Viewpoint - Amazon has agreed to a $2.5 billion settlement regarding claims of enrolling consumers in Prime memberships without consent and complicating the cancellation process [1][2]. Group 1: Settlement Details - The settlement includes a $1 billion civil penalty, marking the largest penalty for an agency rule violation [2]. - A $1.5 billion fund will provide refunds to approximately 35 million consumers, representing the second largest restitution amount obtained by the FTC [2]. Group 2: Regulatory Actions - The FTC's complaint against Amazon was filed in 2023, and a jury trial had commenced prior to the settlement [2]. - U.S. District Judge John H. Chun approved the settlement on Thursday [2]. Group 3: Consumer Protection Measures - The settlement mandates a clear option for customers to decline Prime membership and prohibits misleading buttons related to free shipping [4]. - Amazon is required to provide clear disclosures regarding auto-renewal, costs, and charge frequency, with compliance monitored by a third-party supervisor [4]. Group 4: Evidence and Statements - The FTC highlighted evidence indicating that Amazon employed manipulative tactics to enroll consumers in Prime and made cancellation difficult [3]. - Internal discussions among Amazon employees referred to unwanted subscriptions as an "unspoken cancer" [5].