Amazon hit with record $2.5 billion fine for misleading Prime subscribers

Amazon has agreed to pay a historic $2.5 billion settlement to the Federal Trade Commission (FTC), resolving allegations that the e-commerce giant deceptively enrolled customers into Prime memberships and made cancellations overly burdensome. 

The settlement, announced on September 25 includes $1 billion in civil penalties — the largest fine in FTC history — and $1.5 billion in restitution to consumers who were either misled into signing up or faced hurdles when trying to cancel. Customers eligible for refunds include those who joined Prime via the company’s “Single Page Checkout” between June 23, 2019, and June 23, 2025. 

The FTC first sued Amazon in 2023, accusing it of violating the Restore Online Shoppers’ Confidence Act, a law designed to protect consumers from misleading online billing practices. The agency claimed Amazon’s design tactics — sometimes referred to internally as “Iliad,” a nod to the drawn-out Trojan War siege — were intentionally complex, requiring multiple confirmation steps to cancel Prime. 

Amazon, which admitted no wrongdoing, said it “clearly explains Prime’s terms” and provides straightforward cancellation options online, by phone, and via chat. 

Prime is central to Amazon’s business model. At $139 annually or $14.99 monthly, it offers perks such as free shipping, streaming content, and Whole Foods discounts. The program has more than 200 million members worldwide and generated over $12 billion in subscription revenue in the latest quarter, a 12% jump from the previous year. 

The case was launched during the Trump administration in 2021 but gained traction under FTC Chair Lina Khan, a prominent antitrust advocate appointed by President Biden. It precedes a broader FTC antitrust suit accusing Amazon of monopolistic control of online commerce.