The US Federal Trade Commission (FTC) has secured a settlement with Amazon. The commission’s lawsuit, filed in 2023 in the Western District of Washington state, alleged that Amazon and some of its executives had been “misleading millions of consumers into enrolling in [subscription service] Prime,” through “confusing and deceptive user interfaces” and of making it “complex and difficult” for customers to cancel their subscriptions – all in violation of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).
The FTC says it unearthed internal documents in which executives and employees write that “subscription driving is a bit of a shady world” and that leading consumers to unwanted subscriptions is “an unspoken cancer.”
Amazon will be paying a $1 billion civil penalty (the highest in history for an FTC rule violation) and $1.5 billion in refunds to some 35 million customers (the second-highest restitution ever obtained by the FTC). Amazon will in addition be substituting what the FTC calls a “clear and conspicuous button for customers to decline Prime” for the current “No, I don’t want Free Shipping” button, disclosing all material terms during enrollment, and paying for an independent, third-party supervisor to ensure it follows through with customer redress.
Amazon released a statement: “Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers. We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world. We will continue to do so, and look forward to what we’ll deliver for Prime members in the coming years.”
