Amazon Hit With $2.5B FTC Settlement Over Subscriptions
We’ve all been there: you’re pulling into your driveway and spot another Amazon box on the porch. For many of us, Prime has become a near-daily part of life with one-click ordering, two-day shipping, and the satisfaction of packages magically appearing. But what happens when the convenience of signing up for Prime isn’t matched by the convenience of canceling it?
That’s exactly what the Federal Trade Commission (FTC) just took Amazon to task over, announcing a record-breaking $2.5 billion settlement that requires the company to change its practices by paying $1 billion in civil penalties, refunding $1.5 billion to consumers, and ending deceptive enrollment and cancellation practices for Prime.
The case followed allegations that Amazon enrolled millions of people in Prime without clear consent, designed confusing sign-up screens with misleading buttons such as “No, I don’t want free shipping,” and made cancellation so frustrating that employees described it as “an unspoken cancer” inside the company. Put simply, Amazon made it easy to join Prime but hard to leave.
Why This Matters (Even Without “Click to Cancel”)
Some businesses may have breathed a sigh of relief earlier this summer when the Eighth Circuit struck down the FTC’s “Click to Cancel” rule, which would have required companies to make cancellation as easy as enrollment.
But the FTC remains focused on companies that make it difficult for consumers to cancel subscriptions. The Amazon case shows that regulators don’t need the Click to Cancel rule to act; they are relying on existing consumer protection laws like the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).
What’s Changing at Amazon
As part of the settlement, Amazon must now:
Offer a clear “Decline Prime” button (no more guilt-trip wording)
Disclose all key terms up front, such as cost, auto-renewal, and cancellation rules
Allow cancellation using the same method used to sign up (no more endless clicking through pages)
Hire an independent monitor to ensure refunds and compliance
This case isn’t just about Amazon. It warns every business that sells subscriptions, from streaming services to gyms to software platforms: trapping customers in subscriptions can bring legal trouble and damage trust.