On September 25, 2025, on the second day of what was expected to be a 30-day jury trial, the Federal Trade Commission (FTC) announced it had settled its claims against Amazon.com and two Amazon executives related to allegedly deceptive Prime enrollment and cancellation practices in a record-breaking deal that could cost Amazon up to $2.5 billion, including the largest civil penalty ever imposed for an FTC rule violation and the second-highest restitution award in the agency’s history. The FTC voted unanimously to approve the settlement.
Allegations Against Amazon
The FTC’s allegations, brought under the Biden Administration and then-Chair Lina Khan, claimed that Amazon used confusing and deceptive user interfaces, which the prior Administration referred to as “dark patterns”, to coerce consumers into unwittingly enrolling in Prime. Once consumers were enrolled, the FTC alleged, Amazon intentionally created a lengthy cancellation process so complex Amazon allegedly referred to its cancellation process internally as the “Iliad” in a reference to Homer’s famously long epic. According to the FTC, internal Amazon documents uncovered in discovery showed that Amazon executives and employees acknowledged the enrollment and cancellation tactics, with comments such as “subscription driving is a bit of a shady world” and calling unwanted subscriptions “an unspoken cancer.”
The FTC first brought its claims against Amazon in June 2023, alleging violations of Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).
Settlement Terms
The settlement includes both financial penalties and conduct requirements for Amazon and its employees.
Historic monetary judgment
The FTC’s settlement with Amazon includes a record-breaking civil penalty and consumer redress. Amazon must pay a $1 billion civil penalty for allegedly violating ROSCA, with half due within 14 days and the remainder in 18 months. In addition, Amazon must pay up to $1.5 billion in consumer redress, which the FTC stated will provide full relief for an estimated 35 million affected consumers.
Despite the size of the penalties, former FTC Chair Lina Khan criticized the settlement amount on X (formerly Twitter) as “a drop in the bucket for Amazon and, no doubt, a big relief for the executives who knowingly harmed their customers.”
Conduct requirements
Amazon also agreed to substantial conduct requirements. The settlement requires the company to:
- Avoid misrepresentations regarding features of Prime’s negative option, or automatic renewal, features.
- Disclose all material terms of Prime’s negative option features to consumers before collecting billing information.
- Obtain express informed consent before charging consumers for Prime.
- Provide cancellation mechanisms that are simple, offered in the same medium, and use the same method consumers used to sign up for Prime.
- Include a clear option for consumers to decline Prime subscription offers.
- Clearly reference Prime membership when promoting other Amazon subscriptions.
The settlement further provides that if the FTC issues an amended Click-to-Cancel Rule, those requirements would supersede the conduct requirements in the agreement. This provision suggests that the FTC may be considering reissuing the rule, which was struck down by the Eighth Circuit in July 2025.
Key Takeaway: Continued ROSCA Enforcement
The FTC’s settlement demonstrates its continued focus on enforcing ROSCA and investigating companies’subscription and cancellation practices. This action is another example of the Trump-Vance FTC’s emphasis on “kitchen table issues” that affect American families.
Online sellers should review their subscription practices to ensure that consumers are not enrolled deceptively and that simple cancellation methods are available. Failure to do so could lead to hefty financial and reputational consequences.
If you have any questions, or would like additional information, please contact one of the attorneys on our Consumer Protection/FTC team.
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