The Federal Trade Commission announced a historic $2.5 billion settlement with Amazon.com, Inc., resolving allegations that the e-commerce giant enrolled millions of consumers in Prime subscriptions without their consent and knowingly made it difficult for consumers to cancel their memberships. The settlement also names Amazon Senior Vice President Neil Lindsay and Vice President Jamil Ghani as parties to the agreement.

Under the terms of the settlement, Amazon will pay a $1 billion civil penalty and provide $1.5 billion in refunds to consumers harmed by the company's deceptive Prime enrollment practices. The company must also cease its unlawful enrollment and cancellation practices for Prime subscriptions.

"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."

The FTC charged Amazon and the executives with violating the FTC Act and the Restore Online Shoppers' Confidence Act (ROSCA) by knowingly misleading millions of consumers into enrolling in Prime. According to the agency's allegations, Amazon created confusing and deceptive user interfaces designed to lead consumers to enroll in Prime without their knowledge or clear consent.

The enforcement action reveals that Amazon compounded these deceptive enrollment practices by creating a deliberately complex and difficult process for consumers seeking to cancel their Prime subscriptions. The FTC alleged this cancellation process was designed with the specific goal of preventing consumers from successfully ending their memberships.

Internal Amazon documents discovered during the investigation showed that company executives and employees were aware of these problematic practices. According to the FTC, Amazon personnel made comments acknowledging the questionable nature of their subscription practices, including statements that "subscription driving is a bit of a shady world" and that leading consumers to unwanted subscriptions represented "an unspoken cancer" within the company.

The monetary judgment represents a significant enforcement milestone for the FTC. The $1 billion civil penalty marks the largest ever imposed in a case involving an FTC rule violation. Additionally, this case represents only the third ROSCA enforcement action in which the FTC has obtained civil penalties, highlighting the severity of Amazon's alleged conduct.

The $1.5 billion in consumer redress is designed to provide full relief for an estimated 35 million consumers who were impacted by unwanted Prime enrollments or faced difficulties canceling their subscriptions. The settlement requires Amazon to implement new procedures to ensure consumers clearly understand and consent to Prime enrollment and can easily cancel their subscriptions when desired.

Chairman Ferguson emphasized the agency's commitment to protecting consumers from deceptive subscription practices. "Today, we are putting billions of dollars back into Americans' pockets, and making sure Amazon never does this again," he said. "The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay."

The settlement comes as federal regulators have increased scrutiny of subscription-based business models, particularly practices that make it difficult for consumers to cancel recurring services. The case against Amazon highlights how even major technology companies can face significant financial penalties for allegedly deceptive business practices.

For Amazon, the settlement resolves a lengthy investigation that could have resulted in a protracted legal battle. While the company has not admitted wrongdoing as part of the settlement, it must comply with new requirements designed to protect consumers from unwanted subscription enrollments and ensure transparent cancellation processes.

The enforcement action against Amazon executives Lindsay and Ghani demonstrates the FTC's willingness to hold individual corporate leaders accountable for allegedly deceptive practices, not just the companies they represent. This approach reflects a broader trend in federal enforcement actions targeting both corporate entities and the executives who oversee problematic business practices.

The settlement requires Amazon to implement comprehensive reforms to its Prime enrollment and cancellation processes. These changes must ensure that consumers clearly understand what they are agreeing to when signing up for Prime and can easily cancel their subscriptions without navigating complex or confusing procedures.

Consumers who believe they were affected by Amazon's Prime enrollment practices may be eligible for refunds under the settlement terms. The FTC will oversee the distribution of the $1.5 billion consumer redress fund to ensure affected customers receive appropriate compensation for unwanted charges and subscription fees.

This enforcement action represents one of the largest consumer protection settlements in FTC history and sends a clear message to other companies about the financial consequences of allegedly deceptive subscription practices. The case underscores the agency's continued focus on protecting consumers in the digital marketplace, where subscription services have become increasingly prevalent across various industries.