Amazon Fined $2.5 Billion for Tricking Customers Into Prime Memberships

WASHINGTON — Amazon will pay a record-setting $2.5 billion to settle allegations that it misled customers into signing up for Prime memberships and made canceling difficult, the Federal Trade Commission announced Thursday.

The settlement includes a $1 billion civil penalty — the largest in FTC history — and $1.5 billion in refunds to affected consumers. According to the agency, Amazon used deceptive design tactics that enrolled users in Prime without clear consent and created a complex, multi-step cancellation process internally referred to as “Iliad.”

The FTC said eligible customers include those who may have been misled by the company’s “Single Page Checkout” between June 23, 2019, and June 23, 2025.

Amazon, which did not admit wrongdoing in the agreement, has defended its practices and claimed it provides clear information and easy cancellation options. 

The FTC first began looking into Amazon’s practices in 2021. The lawsuit was filed in 2023 under FTC Chair Lina Khan, shortly before the agency launched a broader antitrust case accusing Amazon of monopolistic behavior.

Amazon Prime, which offers shipping perks, streaming content, and discounts for $139 a year, is a major part of the company’s business. It has more than 200 million members and generated over $12 billion in subscription revenue last quarter.