Amazon to Pay Record $2.5 Billion to Settle FTC Claims of Deceptive Prime Membership Signup and Cancellation Practices

Businesses making negative option or auto-renewal subscription offers, beware: Federal Trade Commission (FTC or Commission) enforcement is alive and well in 2025. Although the U.S. Court of Appeals for the Eighth Circuit struck down the FTC’s much-criticized Biden-era “click to cancel” rule earlier this summer, on September 25, 2025 the FTC announced that Amazon.com, Inc. and two of its senior executives agreed to pay $1 billion in FTC fines and another $1.5 billion in consumer refunds to settle allegations that Amazon “knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service” and intentionally made Prime membership difficult to cancel. The FTC asserts that the Amazon settlement is just the third time in which the FTC has obtained a civil penalty under the Restore Online Shoppers’ Confidence Act (ROSCA) and represents the second-largest restitution award ever obtained by the FTC.

The FTC’s June 21, 2023 complaint alleged that Amazon deliberately tricked consumers into enrolling in Prime through the use of dark patterns – user interfaces designed to manipulate consumers into making decisions they would otherwise not make – to boost the company’s profits. The reason? Prime members are Amazon’s most lucrative customers. The FTC amended the complaint in September of 2023 to add three individual Amazon executives, alleging that they intentionally created a complicated cancellation process for Prime members that “slowed, avoided, and even undid user experience changes” because those changes would also negatively affect Amazon’s bottom line. According to the amended complaint, such practices violated Section 4 of ROSCA, which prohibits charging consumers through online negative option features (such as auto-billing) without first clearly and conspicuously disclosing all material terms related to the transaction, obtaining express consent, and providing simple mechanisms to stop recurring charges. The FTC also alleged a violation of Section 5 of the FTC Act, which prohibits deceptive practices. Amazon and two of the individual defendants agreed to the settlement.

Under the stipulated final order, Amazon must:

• Pay a $1 billion civil penalty and $1.5 billion in reimbursements to affected consumers;
• Clearly and conspicuously disclose all material terms of any negative option feature before charging consumers;
• Replace its “No, I don’t want Free Shipping” button with a clear and conspicuous option or button that allows consumers to decline Prime membership;
• Simplify the Prime cancellation process; and
• Notify Amazon customers of the settlement (to be overseen by a court-appointed supervisor).

The company has 30 days from the date of the final settlement order to pay the refund monies into a fund for eligible consumers, set up a settlement website, and pay all costs of the settlement program for its duration.

The FTC’s November 17, 2023 opposition to Amazon’s motion to dismiss and the court’s May 28, 2024 order denying defendants’ motion to dismiss discuss details such as formatting, positioning, font size, colors and other features in relation to the ROSCA mandates requiring clear and conspicuous disclosure, express consent, and simple cancellation mechanisms for businesses interested in evaluating those details.

It appears the FTC had and has ample authority to take action if a business fails to provide ROSCA-compliant mechanisms when offering automatically renewing subscriptions and negative option offers. The Commission vote approving the stipulated final order was 3-0. 

Amazon’s statement about the FTC settlement is available here.