FTC Secures $2.5 Billion Deal With Amazon Over Prime Subscription Traps

When Andrew N. Ferguson, Chairman of the Federal Trade Commission announced a historic $2.5 billion settlement, the headlines were impossible to ignore. The deal, signed in Washington, D.C. on September 19, 2025, targets Amazon.com, Inc. for allegedly enrolling millions of shoppers in Amazon Prime subscription trap schemes without clear consent.

Key defendants include Neil Lindsay, Senior Vice President of Amazon’s subscription services, and Jamil Ghani, Vice President of Consumer Experience. Both executives are named in the FTC’s complaint, which cites internal emails that describe the practice as “a bit of a shady world” and liken involuntary enrollments to “an unspoken cancer.”

What sparked the FTC’s investigation?

The agency began digging in early 2019 after a surge of consumer complaints about unexpected Prime charges. The FTC’s Office of Consumer Protection discovered that Amazon’s checkout flow, the universal Prime decision page, and even the Prime Video sign‑up screen employed so‑called “dark patterns”—design tricks that hide or blur the true cost of a subscription.

Between June 23, 2019, and June 23, 2025, the FTC alleges that Amazon automatically enrolled customers when they clicked a single button for free shipping, selected a payment method, or simply scrolled past a checkbox. Adding insult to injury, the company allegedly made canceling a Prime membership a maze of extra clicks, confusing language, and hidden menus.

Details of the $2.5 billion settlement

• Amazon will pay a $1 billion civil penalty straight to the U.S. Treasury.
• A $1.5 billion consumer‑refund pool will be distributed automatically to eligible Prime members.
• The settlement is the largest ever recorded under the Restore Online Shoppers' Confidence Act (ROSCA).
• Amazon must permanently ban the use of deceptive UI designs for any subscription product in the United States.
• Compliance reporting will be overseen by an FTC‑appointed monitor for the next five years.

Under the terms, refunds of up to $51 per account will be processed by December 25, 2025. Consumers who qualify will receive the money without any action required—an automatic credit to the payment method on file. A supplemental claims process kicks off in early 2026 for anyone who missed the automatic window.

The FTC also demanded that Amazon make its cancellation flow a single, clearly labeled step, and that the company provide a plain‑language summary of subscription terms before any charge is applied.

How consumers can claim refunds

Eligibility hinges on three criteria:

1. The account signed up for Prime between June 23, 2019, and June 23, 2025, through any of the flagged enrollment flows.
2. The user attempted—and failed—to cancel the subscription during that same period.
3. The account used no more than three Prime benefits (e.g., Prime Video, Prime Music) in any consecutive 12‑month stretch after enrollment.

If you meet those conditions, you should see a credit appear on your statement by the end of 2025. The FTC warns that it will never contact you directly about the refund and that any solicitations asking for money are scams. Instead, consumers can verify the process on the official FTC portal.

Reactions from Amazon and consumer advocates

Amazon’s spokesperson, who asked to remain anonymous, called the settlement “a constructive step forward.” The statement noted that the company “has already redesigned its checkout experience and is committed to transparent pricing.” Critics, however, remain skeptical. Consumer‑rights group Truth in Advertising issued a press release saying the settlement “doesn’t go far enough” because the penalty is a fraction of Amazon’s annual profit.

Meanwhile, the National Consumer Law Center praised the FTC’s “monumental win,” citing the case as a blueprint for future actions against subscription traps across the tech sector.

Implications for the e‑commerce industry

Legal scholars say the case could reshape how online retailers design user interfaces. Professor Laura Sanders of Georgetown Law notes, “When a giant like Amazon is forced to stop using dark patterns, the ripple effect will be felt across the entire ecosystem—from niche apps to major marketplaces.”

Investors are already adjusting. Amazon’s stock hovered around $138 per share shortly after the announcement, a modest dip compared to a $5‑million drop the day before the news broke. Analysts attribute the resilience to Amazon’s diversified revenue streams beyond Prime.

In practical terms, shoppers can expect clearer language on subscription pages, an “Easy Cancel” button prominently displayed, and, perhaps most importantly, a reminder that they have the right to opt out at any time without penalty.

What’s next?

The FTC will monitor Amazon’s compliance for the next five years. If the company slips, additional penalties could be imposed. Consumer watchdogs are already gearing up to file follow‑up complaints against other platforms that rely on similar enrollment tactics.

For everyday users, the takeaway is simple: read the fine print, and don’t assume a free‑shipping offer automatically means a paid subscription. The settlement proves that regulators are finally catching up with the digital tricks that have haunted shoppers for years.