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In September, Amazon It settled its case with the Federal Trade Commission over whether it misled customers who signed up for Amazon Prime. the $2.5 billion settlement It’s one of the largest consumer protection settlements in US history, and even though Amazon hasn’t admitted to any wrongdoing, it’s still shaking things up.
The FTC said $1.5 billion will go into a fund to reimburse eligible subscribers, with the remaining $1 billion collected as a civil penalty. The settlement requires Amazon to add a “clear and obvious” option to decline Prime during checkout and to simplify the cancellation process.
“Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers,” said Mark Plavkin, a senior director at Amazon. He said in a statement. “We work incredibly hard to make it clear and simple for customers whether to sign up or cancel their Prime membership, and to deliver great value to millions of loyal Prime members around the world.”
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Why did the FTC sue Amazon?
The Federal Trade Commission has filed a lawsuit against Amazon in 2023, accusing it of using “dark patterns” to push people into Prime subscriptions and then making it extremely difficult to cancel them. The Federal Trade Commission (FTC) asserted that Amazon violated Section 5 of the FTC Act and Online Shopper Trust Restoration Act.
“Specifically, Amazon used manipulative, coercive, or deceptive user interface designs known as ‘dark patterns’ to trick consumers into signing up for automatically renewing Prime subscriptions,” FTC Complaint Countries.
Who is eligible for Amazon’s big payout?
Amazon’s legal settlement is limited to customers who signed up for Amazon Prime between June 23, 2019, and June 23, 2025. It is also limited to customers who signed up for Prime using the “disputed sign-up flow” or who signed up for Prime through any method but were unsuccessful in canceling their memberships.
The FTC has called for specific registration pages, including the Prime Video registration page, the Universal Prime Decision page, the Select Shipping Option page, and the Single Page Checkout page. To qualify for damages, claimants must not have used more than 10 Benefits of Amazon Prime In any 12 month period.
Customers who sign up through those difficult processes and don’t use more than three Prime benefits in one year will automatically be paid by Amazon within 90 days. Other eligible Amazon customers will need to file a claim, and Amazon must send notifications to those people within 30 days of automatic payments being made.
Customers who did not use a contested registration process but instead were unable to cancel their memberships will also need to submit payment claims.
How much will Amazon pay out?
Payments to eligible Amazon claimants will be limited to a maximum of $51. This amount may be reduced depending on the number of Amazon Prime benefits you used while subscribing to the service. These benefits include free shipping and 2-day viewing Shows or movies on Prime Video Or grocery discounts from Whole Foods.