Amazon reaches $2.5B settlement with FTC over 'deceptive' prime program

Settlement Overview - Amazon reached a $25 billion settlement with the FTC over deceptive Prime enrollment tactics [1] - The settlement includes a $1 billion civil penalty to the FTC [2] - A $15 billion consumer fund will reimburse 35 million impacted customers [3] - Amazon is prohibited from misrepresenting Prime terms and must obtain express consent for subscriptions [3] Regulatory & Legal Implications - The agreement names two executives, Jamil Ghani and Neil Lindseay, prohibiting unlawful conduct [4] - The settlement ends a high-profile consumer protection fight and is one of the FTC's largest penalties [4][5] - The case carried potential fines of more than $50000 per violation [4] Market & Financial Impact - The $25 billion fine represents 01% of Amazon's $24 trillion market cap [6] - Amazon shares were relatively flat on the announcement, suggesting the market views it as removing regulatory uncertainty [5][6] - Prime has over 200 million members worldwide and generates billions annually, making it a key program for Amazon [7][8] Key Issues & Changes - The settlement addresses auto-enrollment practices where consumers were charged without explicit permission [9] - Consumers found it difficult to cancel Prime subscriptions and get reimbursed [9] - Amazon will now need to get explicit permission before charging for a subscription [9]