Amazon to pay $2.5 billion Amazon.com to resolve claims from the federal government. We allege that Amazon duped millions of consumers into enrolling in its Prime membership program. Allegations included the discouragement of union collecting dues. According to the complaint, they obstructed customers’ ability to cancel their subscriptions—affecting more than 35 million people nationwide.
The claims are limited to a six-year period, from June 2019 through June 2025. In this window, according to the Federal Trade Commission (FTC), Amazon engaged in aggressive and misleading practices to lure customers into its Prime membership. They had also provided one-month free trials. They didn’t do a good job making it clear that customers would be automatically enrolled after the trial period ended.
According to FTC Chairman Andrew Ferguson, “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.”
If you didn’t order an item via Amazon Prime more than 10 times in a year, you may be entitled to a partial refund. You can earn as much as $51 per participant! But unlike tax refunds, those impacted need to submit a claim in order to get their money back. This settlement should compensate consumers for the financial harm that they suffered as a result of Amazon’s deceptive practices.
In fact, hundreds of millions of people around the globe are now members of Amazon Prime. In the US, that’s $139 a year or $14.99 monthly. In the UK, their annual base fee is £95. This recent settlement is among the latest to reflect the growing backlash against Big Tech and their harmful business practices that violate the rights of consumers.
Ferguson emphasized the significance of this resolution, stating, “Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
The importance of this settlement goes beyond the monetary relief for consumers. It signals a broader commitment by regulatory bodies to hold corporations accountable for practices that may mislead or exploit customers. The digital marketplace is an incredibly dynamic place. This enforcement action should be a wake-up call for all companies to put transparency and fairness at the center of their subscription business model.