Amazon settles FTC lawsuit over Prime subscription practices for record $2.5B settlement

Core Viewpoint - Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC) over allegations of misleading customers regarding Prime subscriptions, which includes a $1 billion civil penalty and $1.5 billion in consumer refunds [1][2]. Settlement Details - The settlement requires Amazon to pay a total of $2.5 billion, which consists of a $1 billion civil penalty and $1.5 billion in refunds to consumers [1]. - This settlement amount is less than 1% of Amazon's revenue from the previous year [2]. Allegations and Practices - The lawsuit, filed in 2023, accused Amazon of using "dark patterns" to mislead customers into subscribing to Prime and complicating the cancellation process [7]. - Dark patterns refer to design choices that intentionally mislead users into actions they might not take willingly [7]. Reactions and Criticism - FTC Chairman Andrew N. Ferguson stated that the settlement represents a significant victory for consumers against deceptive subscription practices [5]. - Senator Elizabeth Warren criticized the settlement, arguing that it does not hold Amazon executives accountable and is merely a minor financial penalty compared to the company's revenue [6]. Company Response - An Amazon spokesperson claimed that the company has always complied with the law and emphasized their commitment to making the subscription and cancellation processes clear and simple for customers [10]. Future Legal Challenges - Amazon is also facing another lawsuit from the FTC, accusing the company of operating as a monopoly, with the trial set to begin in 2027 [12].