Amazon to pay $ 2.5 billion in FTC settlement on the initial “deceptive” tactics

Amazon agreed to pay $ 2.5 billion to settle a lawsuit from the Federal Trade Committee (FTC) on allegations that it is deceiving users in paying the price of the initial subscriptions and making it difficult to cancel membership.

The company will be asked to pay a civil penalty of one billion dollars and provide $ 1.5 billion of the amounts of amounts to an estimated 35 million consumers affected by the “deceptive registration practices of the company”. Amazon is also required to stop “illegal registration and cancellation practices”.

The lawsuit, It was presented in June 2023 According to the Biden Administration, he claimed that Amazon had invented a confusing and deceptive user facades to lead consumers to register in PRIME without knowing them. It also established a complex operation for consumers looking to cancel their subscription by making them going through unnecessary steps, according to FTC.

The settlement comes at a time when Amazon and FTC just started in trial this week, during which the jury was supposed to decide the result.

As part of the settlement, Amazon must include a clear button for customers to refuse to subscribe to Prime. This means that the company can no longer get a button that says, “No, I do not want free shipping.”

Amazon must also clearly reveal the cost of the subscription during the registration process, along with the date of preparing bills and frequency, whether the subscription is automatic, and the cancellation. In addition, the company must create an easy way for consumers to cancel Prime, using the same method as consumers to register in the service.

Andrew n said. Ferguson, Chairman of the Federal Trade Committee in a press statement: “Today, we return billions of dollars to the pockets of the Americans, and make sure that Amazon does not do it again.”

The settlement is one of the largest settlement in the history of FTC. In 2019, Facebook (Meta Now) It reached a settlement of $ 5 billion With the consumer privacy violation agency.

It should be noted that Amazon is still facing another federal lawsuit. FTC accused the company of illegally suffocating On the way to become a presence everywhere for sale in retail and one of the most valuable companies in the world.