Amazon agrees to pay $2.5 billion for “deceptive practices”: Here’s who will get the money

Amazon has agreed to pay a staggering $2.5 billion settlement after the Federal Trade Commission (FTC) accused the tech giant of using “deceptive methods” to enroll customers in its Prime subscription service without their consent.

The case marks one of the largest penalties ever imposed on a U.S. company, highlighting growing scrutiny over Big Tech’s business practices.

What the FTC found

In a lawsuit filed in June 2023, the FTC alleged that Amazon knowingly used manipulative design tactics—sometimes called “dark patterns”—to push millions of people into signing up for Prime.

Once subscribed, the FTC argued, canceling became deliberately complicated, creating what the company itself described as a “Iliad” process that confused and frustrated customers.

The settlement is expected to benefit roughly 35 million customers who were improperly charged for Prime memberships. Details on how and when payments will be issued have not yet been announced.

Amazon initially pushed back, saying its subscription system was transparent and above industry standards. The company even noted it had invested heavily in improving the cancellation process. But regulators said the evidence told a different story.

“The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription,” the FTC said in a statement.

How the money will be divided

Court filings show that of the $2.5 billion Amazon has agreed to pay, $1 billion will go toward civil penalties while $1.5 billion will be distributed directly to consumers.

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