Tech giant Amazon has reached a significant $2.5 billion settlement with the United States Federal Trade Commission (FTC) to resolve allegations of “duping” customers into Prime Video subscriptions and intentionally obscuring the cancellation process. This settlement, announced following an antitrust lawsuit launched by the FTC in 2023, addresses claims that Amazon made Prime membership “extremely difficult” to cancel for millions of customers.

Of the total $2.5 billion settlement, $1 billion is designated as fines to be paid to the FTC, while the remaining $1.5 billion is earmarked for disbursement to affected customers. Amazon has not admitted to any wrongdoing as part of this agreement, a common clause in such settlements.

A substantial number of Prime customers in the U.S., approximately 3.5 crore (35 million) are eligible for a payout from the $1.5 billion fund. Eligibility extends to customers who signed up for Prime between June 23, 2019, and June 23, 2025, through specific offers. Court documents indicate that each affected party will automatically receive $51.

The process for claiming the Prime settlement amount is tiered. U.S.-based customers who used their Prime benefits three times or less in any 12-month period will automatically receive their $51 payout by December 24, 2025. These payments will be made in cash, not Amazon credits or gift cards and processed by a third-party claims administrator. After these automatic payments are completed, the administrator will provide additional information for other eligible Prime customers wishing to file claims, with a submission deadline of July 23, 2026.

Beyond the automatically paid group, other eligible customers include all Prime subscribers who signed up within the specified period and were unsuccessful in canceling their subscriptions, or those enrolled via offers such as free trials or same-day delivery promises. These methods have been referred to as “challenged enrollment flows” in court documents, encompassing certain pages on the Amazon website, including the Universal Prime Decision Page, the Shipping Option Select Page, the Prime Video enrollment flow, and the Single Page Checkout.

FTC Chair Andrew Ferguson lauded the deal as “a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.” However, a Reuters report noted that despite being a significant victory for consumers and the FTC, the settlement remains “relatively painless” for Amazon, given that the $2.5 billion amount represents what the company earns in sales approximately every 33 hours.

Amazon, for its part, stated, “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world.”

As part of the settlement, Amazon has committed to implementing several changes. These include creating a “clear and conspicuous” button allowing customers to decline a Prime subscription and simplifying the cancellation process. Additionally, Amazon has agreed to transparently disclose subscription terms during enrollment and to appoint an independent supervisor to monitor compliance with these new requirements.