Amazon Ordered to Pay Record $2.5 Billion Fine by the FTC

What Happened?

The Federal Trade Commission (FTC) secured a historic order against Amazon.com, Inc., as well as Amazon’s Senior Vice President Neil Lindsay and Vice President Jamil Ghani. Settling allegations that Amazon enrolled millions of consumers in Prime subscriptions without their consent and knowingly made it difficult for consumers to cancel.

Amazon will be required to pay a $1 billion civil penalty, provide $1.5 billion in refunds back to consumers harmed by their deceptive Prime enrollment practices, and cease unlawful enrollment and cancellation practices for Prime.

Andrew Ferguson, the Chair of the FTC, said, ‘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.’

Why it Matters

The settlement is the largest in Amazon’s history and the largest ever civil penalty for violating an FTC rule. Amazon Prime has become a key part of Amazon’s business, with over 200 million members as of September 2025. In its latest financial report, Amazon reported in July that it generated more than $12 billion in revenue for subscription services, marking a 12% increase from the same period last year. In addition to the financial penalties, Amazon will be required to make several changes to the way Prime operates.

According to the FTC, additionally, the settlement requires Amazon to stop their unlawful practices and make meaningful changes to the Prime enrollment and cancellation flows by including a clear and conspicuous button for customers to decline Prime. Amazon can no longer have a button that says, ‘No, I don’t want Free Shipping.’

Amazon must also include clear and conspicuous disclosures about all material terms of Prime during the Prime enrollment process, such as the cost, the date and frequency of charges to consumers, whether the subscription auto-renews, and cancellation procedures. It must create an easy way for consumers to cancel Prime, using the same method that consumers used to sign up. The process cannot be difficult, costly, or time-consuming, and must be available using the same method that consumers used to sign up.

Amazon spokesman Mark Blafkin said, ‘Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers.’ Previously, Amazon had said they believed they could win the case but chose settlement to avoid a long, drawn-out court battle, which could have taken years. That statement is difficult to believe since the settlement amount was so high. 

How it Affects You

The time frame for Amazon to make the changes required by the settlement terms was not made public, but it is likely customers will see those changes soon. The Amazon settlement may serve as a warning to other companies accused of similarly making subscriptions hard to cancel, such as LA Fitness, which faced similar allegations this year.