Amazon Is Refunding $2.5 Billion To Prime Customers - Here's Why

You can officially mark "big Amazon lawsuit" off your 2025 bingo card, as Amazon has legally agreed to refund customers their money in relation to a Federal Trade Commission (FTC) antitrust lawsuit. Originally filed in June 2023, the FTC alleged that Amazon enrolled customers in its premium Prime service without consent. Worse yet, when affected customers made attempts to cancel the subscription, Amazon made it deceptively difficult to do so. It's not the first time Amazon has done something like this. Back in 2023, the FTC and 17 states sued Amazon over alleged monopolistic practices. They claimed Amazon used "punitive and coercive tactics" to unlawfully maintain monopolies.

According to the FTC, several Amazon executives were aware of the difficulties when unenrolling from Prime, and discussed "unlawful enrollment and cancellation issues" which spurred the litigation. Amazon settled, and FTC Chairman Andrew Ferguson says billions of dollars will be put "back into Americans' pockets," with a $1 billion civil penalty and $1.5 billion consumer redress. Amazon is refunding the $1.5 billion to roughly 35 million impacted customers. Amazon must stop its unlawful practices and make meaningful changes to its Prime enrollment and cancellation process, including a clear and conspicuous button that allows users to decline membership. In addition, the button cannot say "No, I don't want Free Shipping," as a catch-all, sort of poking fun at your desire to cancel.

The $1 billion civil penalty is the largest ever penalty in a case involving a violation of FTC rules, and hopefully, it will set a precedent for other companies and service providers. Furthermore, the $1.5 billion consumer redress is the second-highest restitution payment ever achieved by an FTC action. These are two big wins that support the need to protect consumers. They also align with the FTC's click-to-cancel rule, which was meant to make it easier than ever to cancel subscriptions for consumers.

If you are having trouble canceling a subscription, you can reach out to the FTC or your state's attorney general to file a complaint. But this case also shows that related actions take a long time to come to fruition. The FTC's original lawsuit was filed back in 2023 — over two years ago. Affected customers have likely canceled their Prime subscriptions by now, but the good news is they'll be compensated in some way, however small, for not being able to do so earlier. There is also the positive point that Amazon, and companies like it, are motivated to provide clear ways of canceling subscriptions, and the process "cannot be difficult, costly, or time-consuming" for customers. With Prime Video now showing twice as many ads as before, you might actually want to consider canceling your subscription!