Amazon fined $2.5 billion for tricking Prime users into subscription traps

American multinational technology company Amazon has been fined $2.5 billion by the Federal Trade Commission (FTC)  for antitrust breach. The fine, the largest civil penalty in a case involving the FTC, ends a 2-year-long dispute between both parties.

The commission has charged Amazon with tricking consumers into signing up for its Prime subscription service and making it hard to cancel. In the payment plan, Amazon will pay $1 billion in civil penalties and distribute $1.5 billion in funds to about 35 million customers involved in the deceptive Prime enrollment practices. 

While the penalty comes as the largest placed on a firm in the FRC’s history, it’s the second-largest in terms of funds recovered for victims. 

“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 Ferguson, per BBC reports. 

The lawsuit dates back to 2023 during the Biden administration. The FTC, through its investigations, saw that Amazon used tricks to lure users into subscription traps and make it difficult for them to opt out. In terms of trade policies, this is considered an antitrust breach. 

“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 added.

While reacting to the ruling, Amazon spokesperson Mark Blafkin said that the company has always tried to make signing up and cancellation of Prime membership as easy as possible.  He noted that this is backed by its substantial value for Prime members around the world.

“Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers,” he added. 

FTC noted that Amazon failed to have a  “No, I don’t want Free Shipping” option. It added that the company didn’t include clear disclosures about the terms of Prime during the enrollment process, and didn’t provide easy ways to cancel the program.

The $2.5 billion penalty represents 5.6% of Prime’s subscription revenue last year, which amounts to $44 billion, according to analysts. They noted that the settlement holds the power to streamline Prime’s cancellation process. However, they argued that it might not take away the program’s established dominance.

While Amazon didn’t disclose the number of subscribers it has on the product, analysts from the Consumer Intelligence Research Partners estimate that it has 197 million customers as of March 2025. 

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Amazon’s Prime subscription trick 

In its operation, FTC alleged that Amazon used pitches like “Get FREE Same-Day Delivery” without clearly stating that selecting this option would enrol them in Prime.

The agency also claimed that Amazon designed a deliberately complex cancellation system, internally nicknamed “Iliad,” which made it hard for customers to cancel their subscriptions. This process required customers to navigate multiple pages and click several times to confirm cancellation.

In addition, the FTC argued that Amazon’s practices violate consumer protection laws, including the Restore Online Shoppers’ Confidence Act. This law requires online businesses to clearly disclose subscription terms and provide simple cancellation mechanisms.

Prime, which costs $14.99 per month or $139 annually, has been a hallmark of Amazon’s offerings and generates billions of dollars. While the service initially started as an add-on for fast delivery, Prime has ballooned into a multi-pronged service that offers streaming entertainment, grocery delivery, subscriber-only deals and food delivery offerings.

In another antitrust case, the European Union (EU) antitrust commission recently fined search engine giant Google $3.45 billion over anti-competitive practices in its adtech business. This comes after Google allegedly favoured its online display technology product.

In its verdict, made in September, the EU watchdog ordered Google to halt its anti-competitive practices and take appropriate measures. It also ordered the company to submit compliance plans within 60 days and provide an additional 30 days for implementation details.