Millions of Amazon Prime users may soon receive compensation after the online giant agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC). The case centers around allegations that Amazon misled consumers into enrolling in Prime memberships without their consent and made it unnecessarily difficult to cancel them.

Why the Lawsuit Was Filed

The FTC accused Amazon of violating consumer protection rules by using design tactics that nudged users into signing up for Prime, sometimes without realizing it. These tactics, often referred to as “dark patterns,” were allegedly crafted to make the enrollment process easy but the cancellation process confusing and time-consuming.

While Amazon has agreed to the settlement, the company has not admitted to any wrongdoing. It maintains that its sign-up process was clear and that Prime continues to offer value to millions of members worldwide.

How the Settlement Will Be Distributed

Out of the $2.5 billion settlement, $1.5 billion will go directly to affected consumers. The remaining $1 billion will serve as a civil penalty, the largest ever imposed in a case involving a violation of an FTC rule. The FTC says the funds are meant to compensate customers and ensure stronger accountability in the future.

The FTC estimates that around 35 million customers were impacted by these misleading practices. Refunds and payments are expected to vary based on user eligibility and membership activity.

Who Qualifies for a Payment

The settlement covers Amazon Prime users who enrolled between June 23, 2019, and June 23, 2025. There are two main groups eligible for payments:

Group 1: Customers who signed up through what court documents describe as a “challenged enrollment flow,” meaning specific pages or processes that led to unintended sign-ups, such as the Universal Prime Decision Page or the Single Page Checkout. Those who used fewer than three Prime benefits will automatically receive a payment of up to $51 by December 25, 2025.

Group 2: Customers who either signed up using similar methods or faced difficulties canceling their membership. They must show proof of these experiences and have used fewer than ten Prime benefits within any 12-month period. These users will receive notifications from Amazon once they are eligible to file a claim and will have 180 days to do so. Claims are expected to be processed in 2026.

What Comes Next

The settlement still awaits court approval, and the timeline for that decision remains uncertain. However, Amazon has agreed to make significant changes to its Prime enrollment and cancellation process. The company will introduce clearer options to help users understand what they are agreeing to, including a visible “Decline Prime” button. The FTC specifically noted that Amazon can no longer use misleading phrasing such as “No, I don’t want Free Shipping.”

A Step Toward Transparency

This settlement marks a major shift in how digital platforms handle subscriptions. It sends a message that convenience should not come at the cost of transparency. For Amazon, it is an opportunity to rebuild trust and demonstrate that customer clarity matters as much as customer loyalty.