Amazon has reached a landmark $2.5 billion settlement with the U.S. government to resolve allegations of deceptive practices related to its Prime membership program. The Federal Trade Commission (FTC) accused the tech giant of misleading millions of consumers into signing up for Prime and making it excessively difficult to cancel subscriptions. Under the proposed settlement, $1.5 billion will be allocated to refund affected customers, marking the largest civil penalty ever secured by the FTC. The agreement was finalized just days after the trial commenced in Seattle. Amazon neither admitted nor denied the allegations and has not publicly commented on the matter. Prime, which offers benefits like free shipping and streaming services, boasts hundreds of millions of global subscribers, with annual fees of $139 in the U.S. and £95 in the UK. The FTC highlighted Amazon’s use of manipulative tactics, such as pop-ups during checkout that encouraged Prime sign-ups without clear disclosure of terms or cancellation procedures. Additionally, the agency criticized the company’s one-month free trials, which automatically enrolled users into paid subscriptions without explicit consent. FTC Chairman Andrew Ferguson emphasized that Amazon’s practices violated consumer protection laws, stating, ‘We are putting billions of dollars back into Americans’ pockets and ensuring Amazon never repeats these actions.’ An estimated 35 million U.S. customers affected between June 2019 and June 2025 could receive refunds of up to $51. Amazon has agreed to automatically refund users who utilized Prime benefits fewer than three times annually, while those who used it fewer than 10 times must file a claim. As part of the settlement, Amazon is prohibited from using misleading buttons like ‘No, I don’t want free shipping’ and must simplify the cancellation process for Prime memberships.