Amazon has agreed to pay $2.5 billion to settle a lawsuit filed by the U.S. Federal Trade Commission (FTC) that accused the company of misleading consumers in order to lure them into paid Prime subscriptions. reports Reuters.
Despite the record amount, the markets reacted calmly, and the company itself did not admit guilt. Of the total amount, one billion will be transferred to the FTC’s budget, and another 1.5 billion will be directed to a special fund to compensate customers.
About 35 million users will be eligible for the payouts: Those who signed up for Prime through certain offers between June 2019 and June 2025 and barely used the service will automatically receive $51 each, while others who tried to cancel but ran into difficulties will be able to apply for compensation.
According to the FTC, Amazon used a manipulative design on its website that confused customers for years. In particular, clicking on a button offering “Free Same Day Shipping” automatically enrolled users in Prime without a clear warning. At the same time, the unsubscribe process was deliberately made extremely difficult, and even Amazon’s internal documents described it as a “silent cancer”.
As part of the settlement, the company pledged to make subscriptions and cancellations more transparent, including adding a “clear and prominent” button to opt out of Prime. In a statement, Amazon emphasized that the deal would allow it to move forward, with most of the changes being implemented as early as 2022 during the FTC’s investigation.
