Amazon Prime Hit with Record Fine by US FTC

The Federal Trade Commission has imposed a record fine on Amazon Prime, marking a significant regulatory action against the e-commerce giant. This decision underscores growing scrutiny of major tech platforms and their business practices in the United States.

Amazon Agrees to Landmark FTC Settlement

After a drawn-out investigation, Amazon has accepted a sweeping settlement with the U.S. Federal Trade Commission (FTC) that will see the retail giant pay a massive $2.5 billion penalty. Of this unprecedented sum, up to $1.5 billion is earmarked for direct refunds to customers who struggled with the company’s Prime subscription process. This agreement follows allegations by the FTC that Amazon deliberately made it simple to enroll in Prime, while setting up obstacles for those attempting to cancel—a practice seen as deceptive by regulators.

Who Qualifies for a Refund?

The heart of the refund scheme targets individuals in the United States who either subscribed to or tried, unsuccessfully, to cancel Amazon Prime between June 23, 2019, and June 23, 2025. Eligibility comes with caveats: automatic payments will be made to users who accessed their Prime account three times or fewer in any consecutive twelve-month period, with payouts expected before December 24, 2025. A second phase involves a dedicated form, sent via email by January 23, 2026, for those who encountered issues during signup or cancellation. In this round, only those who have not used more than ten Prime benefits within a year are eligible.

Several factors explain this decision:

• Automatic refunds for minimal Prime usage over 12 months.
• Form-based claims for users facing technical hurdles.
• Strict U.S. residency and usage conditions apply throughout.

Payment Process and Timelines

Refunds will be issued strictly in cash—no Amazon credits or gift cards. Once a claim form is received, applicants may wait up to 30 days for the company to determine eligibility. If approved, funds should follow shortly. The final cutoff for claims is July 23, 2026. This initiative reflects ongoing regulatory pressure: even as Amazon maintains it has committed no wrongdoing, the company says it has already taken steps to streamline both sign-up and cancellation processes.

Cancelling Prime: A Simplified Procedure

For current subscribers considering cancellation, the annual fee stands at $139. Ending a membership now requires logging into one’s Amazon account, selecting “Manage Membership,” and proceeding through a few confirmation screens—taking care to confirm permanent cancellation rather than a temporary pause. Step-by-step guides are available to assist users.

In closing, this settlement represents one of the most significant regulatory challenges faced by the e-commerce titan in recent years, and signals heightened scrutiny over subscription-based business models moving forward.