Amazon cuts $2.5B settlement with FTC over allegedly trapping customers in Prime subscriptions

Core Points - Amazon has reached a $2.5 billion settlement with the Federal Trade Commission (FTC) regarding allegations of deceptive practices related to Prime subscriptions [1][4] - The settlement includes a $1 billion civil penalty and $1.5 billion in refunds to approximately 35 million affected consumers [1][5] - The FTC described the settlement as a significant victory for consumers, aiming to prevent future deceptive subscription practices [4][5] Settlement Details - Amazon will pay up to $51 per customer with a valid claim [2] - The company did not admit any wrongdoing as part of the settlement [4] - The settlement is the second-largest in FTC history [9] Compliance Measures - Amazon must implement clearer language for declining Prime subscriptions and make it easier for customers to cancel their accounts [7][8] - The company is required to undergo third-party audits to ensure compliance with the settlement terms [8] - Two Amazon executives are mandated to refrain from unlawful conduct as part of the settlement [7] Background of the Case - The FTC's investigation into Amazon's practices began during President Trump's administration and led to a lawsuit filed in 2023 [6] - The agency accused Amazon of enrolling customers into Prime memberships without consent and complicating the cancellation process [6]