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Amazon agrees $2.5bn settlement for allegedly duping customers into Prime membership
Amazon has reached a historic $2.5bn (£1.9bn) settlement with a US business watchdog over allegations it tricked customers into signing up for Prime membership.
The Federal Trade Commission (FTC) accused the online giant of tricking customers into the membership scheme - which includes perks like faster delivery - and then making it difficult to cancel. The Seattle-based company will pay $1bn (£750m) in civil penalties, and $1.5bn (£1.1bn) paid back to customers unintentionally enrolled in Prime or deterred from cancelling their subscriptions.
Around 35 million Prime customers will be eligible for a payout from the $1.5bn (£1.1bn) fund, the FTC said. Customers who signed up for Prime between 23 June, 2019, and 23 June, 2025, through certain offers, and used few Prime benefits afterwards, will automatically receive $51 (£38).
The FTC accused Amazon of making it deliberately difficult for customers to purchase an item without also subscribing to Prime. It added that customers were, in some cases, presented with a button to complete their transactions, which did not clearly state that it would enrol them into Prime.
Getting out of a subscription was often too complicated, and Amazon slowed or rejected changes that would have made cancelling easier, according to an FTC complaint. The process of unsubscribing, requiring customers to affirm on three pages their desire to quit, was referred to internally as "Iliad.
Amir Nisi
Creative and experienced content writer with 6+ years of experience lazy to create unique content strategy for News5 to turn website visitors into customers.
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