Amazon cuts $2.5B settlement with FTC over accusations it trapped customers in Prime subscriptions | Latest Tech News
Amazon has agreed to a $2.5 billion settlement with the Federal Trade Commission over prices that it knowingly trapped customers into paying for Prime subscriptions, the company announced Thursday.
The ecommerce giant can pay a $1 billion civil penalty and pledge another $1.5 billion in refunds to customers who had been harmed by its conduct, the FTC said in a release.
Amazon will also “cease unlawful enrollment and cancellation practices for Prime.”
About 35 million shoppers had been affected by Amazon’s alleged misdeeds.
Amazon can pay up to $51 per buyer with a legitimate declare.
Amazon didn’t admit wrongdoing as half of the settlement. AP
The company, which may have confronted even steeper fines and refunds if it had misplaced the case in court, won’t admit to any wrongdoing as half of the settlement.
FTC Chairman Andrew Ferguson described the settlement – announced just three days after the jury trial started in Washington federal court – as a “record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.”
Amazon didn’t immediately return The Post’s request for remark.
“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,” Ferguson said in a assertion.
“Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
Amazon was accused of trapping customers in Prime accounts. REUTERS
The FTC started wanting into Amazon’s practices during President Trump’s first time period in workplace and finally filed go well with in 2023 under then-chair Lina Khan, with the company and three of its executives named as defendants.
The company alleged that Amazon enrolled hundreds of thousands of customers into pricey Prime memberships without their consent and then purposefully made it troublesome to cancel the accounts.
As half of the settlement, two of the executives — Neil Lindsay and Jamil Ghani – must chorus from illegal conduct.
Amazon will probably be required to add a button to its web site with apparent language for customers to decline signing up for Prime – moderately than the current language of “No, I don’t want Free Shipping.”
The FTC said it was the second-biggest settlement in its historical past. AP
The company also must make it simpler for current customers to cancel their accounts and submit to third-party audits to guarantee compliance with the settlement phrases.
The Amazon case was one of a number of high-profile actions underway at the FTC, which is also trying to break up Mark Zuckerberg’s Meta and not too long ago sued Ticketmaster over high live performance charges and allegedly turning a blind eye to bot exercise on its web site.
The $2.5 billion settlement is the second-largest ever secured by the FTC, the company said.
With Post wires
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