The Federal Trade Commission has reached a historic $2.5 billion settlement with Amazon. The FTC claims Amazon tricked millions of customers into signing up for Prime subscription services. “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,” according to FTC Chairman Andrew N. Ferguson in a news release.
The e-commerce giant must pay $1 billion in civil penalties and $1.5 billion in refunds to eligible customers. This is the FTC’s largest-ever settlement and the second-highest refund award in its history. Also, Amazon has been ordered to cease its reportedly misleading practices and implement meaningful changes to its Prime program.
In a statement, Amazon did not admit any wrongdoing but agreed to make some changes. “Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers. We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world. We will continue to do so, and look forward to what we’ll deliver for Prime members in the coming years.”
