FTC’s Amazon Lawsuit Ends in Record $2.5B Settlement

Amazon agreed in September 2025 to pay $2.5 billion to settle the Federal Trade Commission’s Amazon Prime lawsuit, which accused the company of tricking millions of customers into signing up for Prime and then making it needlessly hard to cancel. The deal includes a $1 billion civil penalty and $1.5 billion set aside for refunds to roughly 35 million affected customers, with individual payments capped at $51.¹ Amazon denied wrongdoing, saying the agreement lets it “move forward and focus on innovating for customers.”²

Who Qualifies for a Refund

Refunds are available to U.S.-based Prime customers who signed up between June 23, 2019 and June 23, 2025, through one of the enrollment flows the FTC challenged, and who used no more than a limited number of Prime benefits in any twelve-month period after enrolling.³

Light benefit use is the key gate. Customers who used three or fewer Prime benefits in a twelve-month window fall into the automatic-payment group. Customers who used ten or fewer benefits in a twelve-month window may still qualify but need to file a claim.³⁴

How to Get Paid

The refund process runs on two tracks.

Automatic payments. Amazon began sending payments to the automatic group in November 2025. Eligible customers received an email with instructions to claim payment via PayPal or Venmo. If the digital payment went unclaimed within 15 days, Amazon mailed a check to the default shipping address on file, and that check had to be cashed within 60 days.⁴

Claims track. Customers who didn’t get an automatic refund but believe they qualify began receiving claim notices in January 2026. The claims window is 180 days, with a deadline of July 23, 2026. Payment can be taken by check, PayPal, or Venmo, and payouts on the claims track are expected in late 2026.³⁵

Amazon is administering claims through SubscriptionMembershipSettlement.com. Questions can go to admin@SubscriptionMembershipSettlement.com or 1-888-999-8094.³

One warning from the FTC: neither the agency nor Amazon will ever ask you to pay a fee to get your refund. If someone does, it’s a scam.⁶

What Amazon Was Accused of Doing

The FTC’s June 2023 complaint charged Amazon with violating the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) through what it called “dark patterns,” meaning interface designs meant to push users toward outcomes they didn’t intend.⁷ The agency alleged Amazon collected payment details before disclosing that a purchase would trigger a recurring Prime subscription, hid the decline option behind a prominent “Get FREE Two-Day Shipping” button, and at times labeled the opt-out “No, I don’t want Free Shipping.”¹

The cancellation process, which Amazon employees internally nicknamed the “Iliad,” required navigating four screens, clicking six times, and scrolling past up to fifteen prompts designed to talk customers out of leaving. The FTC said the purpose of the “Iliad Flow” was “not to enable subscribers to cancel, but rather to thwart them.”⁷⁸ Internal Amazon communications surfaced in the case described the subscription business as “a bit of a shady world” and warned that leading consumers into unwanted subscriptions was “an unspoken cancer.”¹

Two senior Amazon executives, Neil Lindsay and Jamil Ghani, remained personally named as defendants under the final settlement and must abide by its terms for three years. Neither paid a personal financial penalty, and both kept their jobs.⁹

What Prime Enrollment and Cancellation Have to Look Like Now

The settlement’s injunctive terms bind Amazon for ten years and change how Prime signups and cancellations must work. Before collecting any payment information, Amazon has to clearly disclose every material term: cost, billing frequency, auto-renewal, and how to cancel. The signup page must include a prominent button to decline Prime, and the settlement specifically bans the old “No, I don’t want Free Shipping” phrasing.¹

Cancellation has to be easy. Amazon must offer a process available through the same method the customer used to sign up, and it cannot be “difficult, costly, or time-consuming.” An independent third-party monitor, paid for by Amazon, will oversee compliance.¹ Amazon has said publicly that most of these terms match changes it had already put in place.¹⁰

Was $2.5 Billion Enough

FTC Chairman Andrew N. Ferguson called the deal “a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.” The Commission approved the order unanimously, 3-0.¹

Former FTC Chair Lina Khan, who filed the case in 2023, called the $2.5 billion “a drop in the bucket for Amazon” and said settling days into a jury trial “rescued Amazon from likely being found liable for having violated the law.” Former Commissioner Alvaro Bedoya argued the FTC could have won at trial and put the full evidence into public view.¹¹ Critics noted the payment amounts to about one-tenth of one percent of Amazon’s market capitalization, which exceeds $2.3 trillion. Antitrust researcher Matthew Stoller of the American Economic Liberties Project questioned why Amazon was allowed to settle without admitting wrongdoing after a judge had already ruled at summary judgment that the company violated ROSCA.¹²

What This Settlement Doesn’t Cover

This case is limited to Prime enrollment and cancellation. It is separate from the FTC’s broader antitrust lawsuit against Amazon, filed in September 2023 with 17 state attorneys general, which alleges the company maintains an illegal monopoly over the online marketplace through practices affecting third-party sellers, search rankings, the “Buy Box,” and Fulfillment by Amazon.¹³ That case has not settled and is set for a bench trial beginning February 9, 2027.¹⁴

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FTC. FTC Secures Historic $2.5 Billion Settlement Against Amazon
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About Amazon. Amazon Response on FTC Agreement
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FTC. Amazon Refunds
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CBS News. Amazon Prime Refunds Settlement Payment
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Louisville Courier Journal. Amazon FTC Settlement: How to File Claim, Who Is Eligible
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FTC. Who’s Eligible for a Refund from Amazon
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FTC. FTC Takes Action Against Amazon for Enrolling Consumers in Amazon Prime Without Consent and Sabotaging Their Attempts to Cancel
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FTC. FTC v. Amazon.com, Inc. (ROSCA)
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New York Post. Amazon Cuts $2.5B Settlement With FTC Over Accusations It Trapped Customers in Prime Subscriptions
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Reuters. Amazon to Pay $2.5 Billion to Settle Prime Deception Allegations
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The Hill. Amazon FTC Settlement Prime
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Common Dreams. Amazon FTC Settlement
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FTC. FTC v. Amazon.com, Inc. (Amazon Ecommerce)
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MLex. Amazon Loses Bid to Keep October 2026 Trial Date for US FTC Antitrust Case