Amazon is paying $2.5 billion to settle FTC claims it duped customers into signing up for Prime
Amazon will pay a record civil penalty to settle a case with the Federal Trade Commission. The agency accused Amazon of tricking consumers into signing up for a Prime membership without their consent (and making it hard for customers to cancel) in a lawsuit filed in 2023.
To settle the charges, Amazon has agreed to pay a $1 billion civil penalty and $1.5 billion to refund customers. The company also agreed to "ease unlawful enrollment and cancellation practices for Prime," per the FTC.
The agency says the civil penalty is the largest ever for a case involving a breach of its rules — it had accused Amazon of violating the FTC Act and the Restore Online Shoppers’ Confidence Act. The $1.5 billion in consumer redress will provide "full relief for the estimated 35 million consumers impacted by unwanted Prime enrollment or deferred cancellation," the FTC said. It added that this is the second-highest restitution award it has ever obtained.
Moreover, Amazon will have to stop using some of the dark patterns (i.e. deceptive design practices) that prevented customers from easily canceling Prime memberships.. For instance, it will no longer display a button that reads, "No, I don’t want Free Shipping" during the cancellation flow. Instead, it will have to show a "a clear and conspicuous button for customers to decline Prime," per the terms of the settlement.
Amazon will also have to provide clearer information about a Prime subscription to consumers during the sign-up process. This will include details about the price, whether the subscription auto-renews and how to cancel.
Engadget has contacted Amazon for comment.This article originally appeared on Engadget at https://www.engadget.com/big-tech/amazon-is-paying-25-billion-to-settle-ftc-claims-it-duped-customers-into-signing-up-for-prime-160641347.html?src=rss