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Amazon agrees to settle US lawsuit that it 'tricked' people into Prime
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Amazon to pay $2.5 billion to settle U.S. lawsuit that it 'tricked' people into Prime
Amazon has agreed to settle a landmark case over its Prime membership program, according to U.S. regulators, who had alleged the company's web designs manipulated tens of millions of people into paying for subscriptions that were purposefully hard to cancel.
The Federal Trade Commission says Amazon, without admitting wrongdoing, has agreed to pay a historic $1 billion in civil penalties to the government and another $1.5 billion in redress payments to affected consumers.
NPR has reached out to Amazon for comment.
The parties reached a deal as trial was just beginning in Amazon's hometown of Seattle. Somewhat unusually for a dense antitrust case, a jury was slated to determine whether Amazon broke the law.
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The FTC, which regulates competition, brought the lawsuit in 2023. It accused Amazon of illegally using "manipulative, coercive, or deceptive" designs to get shoppers enrolled in auto-renewing Prime subscriptions, which currently cost $139 a year or $14.99 a month. Regulators also alleged that Amazon purposefully built a convoluted, multi-step cancellation process to discourage people from quitting — and repeatedly backtracked on plans to simplify the process as this led to fewer subscribers.
Throughout the court battle, Amazon denied breaking any laws. It argued its designs and disclosures followed or even surpassed widely used industry standards. The company said its processes were clear to the vast majority of Amazon customers, who chose Prime for benefits such as free two-day shipping.
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Amazon still faces another, bigger federal lawsuit, in which the FTC has accused the company of functioning as a monopoly. The tech giant has described it as "wrong on the facts and on the law." That trial is expected in early 2027, in front of the same judge, John Chun of the U.S. District Court for the Western District of Washington.
Editor's note: Amazon is among NPR's recent financial supporters and pays to distribute some NPR content.
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