Amazon has begun paying $1.5 billion in refunds after being accused of using “coercive” tactics to push Prime subscriptions, with millions potentially able to claim.
It follows a settlement of a lawsuit filed by the Federal Trade Commission (FTC) over “manipulative, coercive, or deceptive user-interface designs” deployed by Amazon to get people enrolled on Prime, while also making it difficult to cancel.
As part of the settlement, Amazon also agreed to change how Prime is marketed and cancelled, including simplifying sign-up flows and making cancellation more prominent and easier to complete.
There are some stipulations as to who can claim. To be eligible, customers must have signed up through Amazon’s “Single Page Checkout” between June 2019 and June 2025, and used no more than three Prime benefits in a 12-month period.
Amazon has sent out the first batch of automatic cheques and electronic payments, which customers should receive within 90 days. It notified affected customers via email, postal mail, and a notice on its website or app confirming they were eligible. Customers who have not been contacted but believe they were affected can now file a claim for compensation online through a form.
A rare regulatory win for the FTC
It is one of the largest agreed settlements made by a technology company with the FTC, with $1.5 billion allocated to those impacted and a $1 billion civil penalty charged to Amazon. It highlights the approach of the FTC commission at the time under Lina Khan, who filed the lawsuit in 2023, which aimed to tackle issues such as subscription design, default choices, and cancellation friction to improve the quality of internet services.
Around 29 million people could receive Amazon’s refund, based on the $51 it has agreed to return to each successful claimant, divided into the $1.5 billion the ecommerce giant has set aside.
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Not privacy for once
It is one of the few landmark regulatory cases in the US, and beyond that, it is not centred on privacy. The FTC’s previous major win was against Facebook in 2019 over privacy violations linked to Cambridge Analytica, a British consultancy firm that acquired the personal data of millions of Facebook users for political advertising.
That case led to a raft of privacy laws and agreements affecting social media, and the FTC is likely hoping for a similar knock-on effect from this agreement.
Even though this case is settled, Amazon still faces other challenges, including accusations of illegal advertising practices under EU privacy law and concerns raised by the Electronic Frontier Foundation over a new feature on Amazon’s Ring doorbell that uses facial recognition to catalogue visitors.
Also read: Another consumer payout programme is underway, with the Google Play settlement moving towards automatic payments.