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Amazon to Pay $1.5B to Prime Members the FTC Says Were 'Trapped' in Subscriptions
Amazon agrees to a $2.5 billion settlement with the FTC over allegations it used deceptive 'dark patterns' to trap users in Prime subscriptions.
Key Points
- Amazon agrees to a $2.5 billion settlement with the FTC over allegations it used deceptive 'dark patterns' to trap users in Prime subscriptions.
- The settlement includes a $1 billion civil penalty and requires Amazon to refund $1.5 billion to eligible members.
- The FTC accused Amazon of engineering a deliberately confusing cancellation process, internally dubbed the 'Iliad Flow,' to retain subscribers.
- The landmark case signals the FTC's increased scrutiny of manipulative design practices across the tech industry.
Amazon will refund $1.5 billion to Prime members as part of a historic $2.5 billion settlement with the Federal Trade Commission over allegations it used deceptive designs to trick users into subscriptions. The settlement, which includes a $1 billion civil penalty, resolves a 2023 lawsuit accusing the company of knowingly trapping consumers in its Prime service.
A feature, not a bug: The FTC’s complaint detailed how Amazon used manipulative user interfaces, or "dark patterns," to push customers into auto-renewing subscriptions. The company also engineered a deliberately confusing cancellation process—internally dubbed the "Iliad Flow"—with the explicit goal of frustrating users into staying. Internal documents acknowledged the practice, with one employee noting that “subscription driving is a bit of a shady world.”
The billion-dollar penalty: Refunds of up to $51 are now being distributed to eligible U.S. Prime members who signed up between mid-2019 and mid-2025. The settlement also requires Amazon to simplify its enrollment and cancellation flows to make them more transparent for users.
The FTC is making a high-profile example out of Amazon, putting the tech industry on notice that deceptive design will come with a hefty price tag. The timing is also notable: Amazon is funding these refunds just after posting strong Q3 results, all while cutting thousands of jobs.
Meanwhile, Amazon is heavily focused on its next act, with CEO Andy Jassy telling investors that AI is driving meaningful improvements in every corner of the business, from its AWS cloud division to its fulfillment network.
