Amazon Will Pay $2.5 Billion In FTC Lawsuit —One Of The Largest Settlements In History

Core Points - Amazon.com, Inc. has agreed to a $2.5 billion settlement over allegations of misleading consumers regarding its Prime subscription service and making cancellation difficult [1] - The settlement follows a 2023 Federal Trade Commission lawsuit that questioned Amazon's consumer treatment and its claims of being consumer-focused [1] Settlement Details - The settlement includes $1 billion in fines and $1.5 billion in compensation for customers, with eligible users expected to receive approximately $51 each [7] - About 200 million Americans use Prime, which generated over $44 billion in revenue in 2024, indicating the significance of Prime members as Amazon's most valuable customers [2] FTC's Broader Agenda - The FTC, led by Chair Andrew Ferguson, is focused on challenging major tech firms for anti-competitive practices and consumer harm, including ongoing antitrust cases against Amazon and Meta [3] - The settlement aligns with the FTC's consumer-first approach, aiming to restore fairness in the marketplace [3] Direct Customer Relief - Within 90 days, Amazon will pay $51 to shoppers who meet the FTC's criteria, including those who enrolled but did not utilize Prime benefits [4] - Customers who believe they were misled into joining or faced difficulties in canceling will receive information on how to file claims [4] Amazon's Statement - Amazon stated that it has always followed the law and views the settlement as a way to move forward and focus on innovation for customers [5] - The company emphasized its efforts to make the sign-up and cancellation processes clear and simple for customers [6] Stock Performance - Following the announcement, Amazon's stock was down 0.65% at $218.77 [6]