Amazon reaches $2.5 bn settlement over Prime enrollment practices

Core Points - Amazon has agreed to pay $2.5 billion to settle allegations from the Federal Trade Commission (FTC) regarding deceptive practices in enrolling consumers in Amazon Prime and complicating the cancellation process [1][2]. Group 1: Allegations and Legal Proceedings - The FTC's lawsuit claimed that Amazon tricked consumers into signing up for the $139-per-year Prime service during checkout [2]. - The case focuses on two main allegations: enrolling customers without clear consent through confusing checkout processes and creating a complex cancellation system known as "Iliad" [3]. - The FTC alleged that the checkout process forced customers to navigate confusing interfaces, making it difficult to decline Prime membership while making sign-ups more prominent [3][4]. Group 2: Settlement Terms - As part of the settlement, Amazon is required to reform its Prime enrollment and cancellation processes, ensuring clear decline options and simplified cancellation procedures [4]. - Amazon must also implement new disclosure requirements before charging consumers [4]. Group 3: Legal Context - A court ruling indicated that Amazon Prime subscriptions are subject to consumer protection laws, and the company obtained consumers' billing information before fully disclosing subscription terms [5]. - The settlement proposal was made prior to further court testimony, with Amazon neither admitting nor denying wrongdoing [5]. - This case is part of a broader trend of bipartisan lawsuits aimed at regulating the power of U.S. tech giants [6].