The US Federal Trade Commission (FTC) has announced a historic settlement with Amazon.com amounting to $2.5 billion, citing that the company enrolled millions of consumers into Prime subscriptions without their consent.

The settlement consists of a $1 billion civil penalty and an additional $1.5 billion in refunds to the consumers affected by such practices. Amazon must also cease unlawful enrollment and cancellation practices for Prime subscriptions, which many consumers have found frustrating.

“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.

For context, the FTC stated that evidence showed Amazon utilized deceptive interfaces designed to mislead consumers into signing up, and set up complex processes making cancellation extremely difficult. Moreover, during pre-trial discussions, Amazon employees referred to subscription traps as “a bit of a shady world” and described unwanted enrollment as “an unspoken cancer.”

According to the FTC, about 35 million consumers were impacted by these practices, leading to the substantial restitution funds.

This agreement will put billions back into the pockets of American consumers, while enforcing changes, including:

• A clear option for customers to decline Prime subscriptions without confusion.
• Mandatory disclosures regarding the terms of Prime, including costs and cancellation processes.
• An easy method for consumers to terminate their Prime membership following the same method they used to sign up.

In conclusion, Amazon has agreed to pay for an independent supervisor to oversee its compliance with this settlement. Although the company claims to have done nothing wrong, the FTC aims to ensure customers are treated fairly in the future.