Amazon Fined Record $2.5B for Deceptive Prime Subscription Practices
Amazon faces a significant setback as the FTC, led by Lina Khan, files a lawsuit alleging deceptive practices in its Prime Video subscription enrollment. The case, appointed by President Biden, has resulted in a record-breaking settlement of $2.5 billion.
The FTC began investigating Amazon's Prime Video subscription practices in 2021, culminating in the lawsuit filed in 2023. The complaint highlights Amazon's deliberate obstruction of customers attempting to purchase items without subscribing to Prime Video. As a result, over 30 million customers may have been affected and are now entitled to compensation through a claims process.
Amazon's process for canceling a Prime Video subscription was found to be overly complex, making it difficult for customers to unsubscribe. The company will now be required to implement a clear cancellation process and refrain from misrepresenting subscription terms. In addition, Amazon will pay a civil penalty of $1 billion, the largest in FTC history, and reimburse eligible customers up to $51 within 90 days of the settlement order.
The FTC's lawsuit against Amazon marks a significant milestone in consumer protection. The record-breaking settlement of $2.5 billion, including $1.5 billion in refunds to affected customers, sends a strong message about the importance of fair business practices. Amazon is now obligated to provide a transparent subscription process, ensuring customers are not misled or obstructed.
