Amazon agrees to pay $2.5 billion in settlement for allegedly tricking customers into Prime subscription

Amazon has officially agreed to pay a historic $2.5 billion settlement to resolve a landmark lawsuit over its Prime membership program, which tricked customers into paying for subscriptions that were deliberately difficult to cancel.

The company has agreed to pay a historic $2.5 billion settlement to the U.S. government, resolving a landmark lawsuit which alleged the company used manipulative web designs to trick tens of millions of people into paying for Prime subscriptions.

Amazon has released an official statement that its executives have already followed the law, and this settlement allows them to move forward and focus on innovating for customers.

Millions of people who paid for Amazon Prime between mid-2019 and 2025 are expected to be automatically compensated up to $51, while other Amazon users will be able to submit claims for refunds.

Amazon will explain the matter in detail on its website and will make other changes to how Prime subscription options are displayed to shoppers.

The federal lawsuit charges Amazon for illegally using “manipulative, coercive or deceptive” designs to “trick” consumers into enrolling in auto-renewing Prime subscriptions, which cost $139 a year or $14.99 a month.

The regulators also alleged that Amazon intentionally built a multi-step cancellation process to discourage people from quitting and repeatedly backtracked on plans to simplify the process, which ultimately led to fewer subscribers.

The case went to trial in Amazon’s hometown of Seattle this week, and a jury will decide whether Amazon violated the law.

The company denied breaking any laws and argued that its cancellation processes were simple and clear to the vast majority of customers.

Additionally former FTC chair Lina Khan has filed the lawsuit in a social media post on Thursday, stating that it comes just a few days into Amazon’s jury trial and rescued the company from likely being found to have violated the law.

He further explained that the $2.5 billion fine is a drop in the bucket for Amazon and a big relief for executives who intentionally harmed their customers.