Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—W.D. Wash.: Amazon agrees to pay $2.5 billion to settle FTC charges over Prime cancellation roadblocks, (Sep 25, 2025)

By Peter Reap, J.D., LL.M.

The retailer will also be required to implement changes to its Prime subscription program, including an easier cancellation option and clear disclosures.

The FTC announced that it has secured a historic settlement with Amazon.com, Inc., as well as Senior Vice President Neil Lindsay and Vice President Jamil Ghani, in their ongoing litigation over the company’s alleged deceptive practices related to Amazon Prime free shipping service subscriptions. On September 25, 2025, the federal district court in Seattle approved the stipulated settlement after trial in the case had begun earlier in the week. The settlement resolves allegations that Amazon violated the FTC Act and the Restore Online Shoppers' Confidence Act (ROSCA) by enrolling millions of consumers in Prime subscriptions without their consent and knowingly making it difficult for consumers to cancel. Amazon will be required to pay a $1 billion civil penalty, provide $1.5 billion in refunds back to consumers harmed by their deceptive Prime enrollment practices, and cease unlawful enrollment and cancellation practices for Prime (FTC v. Amazon.com, Inc., No. 2:23-cv-00932-JHC (W.D. Wash. Sept. 25, 2025)).

Ferguson comments on settlement. “Today, the Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel,” said FTC Chairman Andrew N. 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. Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again. The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”

Allegations. The FTC’s complaint alleged that Amazon knew that a percentage of consumers accidentally signed up for Prime, and that a percentage of those consumers were charged for multiple months before they cancelled their memberships. Amazon identified and implemented changes that increased “clarity;” but Amazon later rolled back these changes because they reduced the number of new Prime subscribers. It also alleged that a reasonable company in Amazon’s position running a subscription service that offers auto-renewing subscriptions would be aware that state and federal laws regulate negative option marketing and require that material terms be clearly and conspicuously disclosed and that they must obtain express informed consent before charging consumers.

The FTC alleged that Amazon used “dark patterns” or deceptive user-interface designs, to manipulate and coerce millions of Amazon customers into enrolling in Amazon Prime. During Amazon’s online checkout process, consumers were faced with numerous opportunities to subscribe to Amazon Prime at $14.99/month. In many cases, the option to purchase items on Amazon without subscribing to Prime was more difficult for consumers to locate. In some cases, the button presented to consumers to complete their transaction did not clearly state that in choosing that option they were also agreeing to join Prime for a recurring subscription. This nonconsensual enrollment issue was well known to Amazon executives.

Further, the FTC alleged that Amazon designed its Prime cancellation process to frustrate consumers into giving up before cancelling the membership. Consumers that wanted to cancel Prime had to first locate the cancellation flow, which Amazon made difficult. The complaint alleged that Amazon internally named that process “Iliad,” which refers to Homer’s epic about the long, arduous Trojan War, and that Amazon and its leadership slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes adversely affected Amazon’s bottom line.

The FTC alleged violations of the FTC Act and the Restore Online Shoppers' Confidence Act (ROSCA) and sought a permanent injunction. The agency also alleged that three individual defendants had actual or constructive knowledge of the requirements of ROSCA and that the Prime sign-up and cancellations flows were misleading to consumers.

Motion to dismiss denied. In May 2024, the court denied motions to dismiss filed by Amazon and the individual defendants, finding that the FTC pleaded sufficient facts to support the claims.

Cross motions for summary judgment denied. On September 17, 2025, the court mostly denied the parties’ cross-motions for summary judgment, setting the stage for trial.

Settlement details. The settlement with Amazon and individual defendants Neil Lindsay, and Jamil Ghani is only the third ROSCA case in which the FTC has obtained a civil penalty, the agency said. It includes:

• a $1 billion civil penalty, which is the largest ever in a case involving an FTC rule violation; and

• $1.5 billion in consumer redress, providing full relief for the estimated 35 million consumers impacted by unwanted Prime enrollment or deferred cancellation. This is the second-highest restitution award ever obtained by FTC action.

Additionally, the settlement requires Amazon to stop their unlawful practices and make meaningful changes to the Prime enrollment and cancellation flows by:

• including a clear and conspicuous button for customers to decline Prime. Amazon can no longer have a button that says, “No, I don’t want Free Shipping.”

• Including clear and conspicuous disclosures about all material terms of Prime during the Prime enrollment process, such as the cost, the date and frequency of charges to consumers, whether the subscription auto-renews, and cancellation procedures.

• creating an easy way for consumers to cancel Prime, using the same method that consumers used to sign up. The process cannot be difficult, costly, or time-consuming and must be available using the same method that consumers used to sign up; and

• paying for an independent, third-party supervisor to monitor Amazon’s compliance with the consumer redress distribution process.

In a separate stipulation, the FTC agreed to dismissal of all claims against the third individual defendant, Russell Grandinetti.

The Case is No. 2:23-cv-00932-JHC.

Judge: Chun, J.

Attorneys: Evan Mendelson for the FTC. Kenneth E. Payson (Davis Wright Tremaine LLP) for Amazon.com Inc.

Companies: Amazon.com Inc.

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