Amazon to Pay $2.5 Billion for Predatory Subscription Tactics

Amazon will have to cough up $2.5B in fines, paid to its subscribers, after settling a case with the Federal Trade Commission where the FTC alleged that Amazon had signed up users for their Prime service without the users knowledge.

Of that $2.5 billion, $1.5 billion will be dispersed among the estimated 35 million affected users across the USA.

FTC chairman Andrew Ferguson stated that “The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription.”

Amazon will not admit any wrongdoing as part of the settlement, but has agreed to create a “clear and conspicuous” button allowing users to decline the option to join Prime.

Historical Restitution

This settlement is the second-largest restitution that the FTC has received from an investigation, agency officials claim.

In Canada, the Competition Bureau said earlier this year that it has a probe of its own investigating a separate matter. Amazon Prime retails for $139 USD in the United States and $99 CAD in Canada for a yearly subscription.

It’s estimated that there are almost 200 million Amazon Prime users in North America, per AmazonScout.

“A Shady World”

The FTC’s investigation found documents from Amazon executives and employees expressing knowledge of the tactics with comments like: “subscription driving is a bit of a shady world”, and likening the result of their tactics to “an unspoken cancer”.

Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription

The FTC began probing Amazon’s tactics during Donald Trump’s first Presidency, eventually filing the probe during the Biden administration.

Once again, Amazon will not admit any wrongdoing as part of the settlement. A spokesperson said, “Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers,” on Thursday.