Tech giant, Amazon has reached a $2.5 billion settlement to end a legal battle with the United States Federal Trade Commission (FTC).
Naijaonpoint reports that this comes amid claims that the company used deceptive methods to sign up customers for its Prime subscription and made it difficult for them to cancel.
The case began in 2023 when the FTC accused the e-commerce company of using manipulative designs that led shoppers into auto-renewing Prime memberships.
The regulator also said Amazon intentionally set up hurdles that complicated the cancellation process, even ignoring internal suggestions to make it simpler because the complex system reduced the number of people opting out.
The settlement, finalized shortly after a trial started in Seattle, requires Amazon to pay $1 billion in civil penalties to the government and $1.5 billion in refunds to customers.
Shoppers who paid for Prime between mid-2019 and mid-2025 will automatically receive refunds of up to $51 depending on how much they used Prime benefits.
Others may submit claims to get compensation.
Amazon is also restricted from using misleading prompts such as buttons suggesting customers do not want free shipping.
The company must now provide a clearer and easier way for people to cancel their Prime subscriptions.
The FTC said that the agreement represents the largest civil penalty in a case involving a rule violation by the commission and the second-highest restitution amount in its history.
Although the settlement resolves the matter, Amazon did not admit to wrongdoing.
The company stated that its sign-up and cancellation processes have always been clear and lawful, adding that the resolution allows it to focus on future innovations for its customers.
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