Amazon to Pay $2.5 Billion Settlement for Alleged Prime Membership Scam

Amazon to Pay $2.5 Billion to Settle U.S. Lawsuit Over Prime Membership Program In a landmark settlement, Amazon has agreed to pay $2.5 billion to resolve a lawsuit filed by the U.S. government alleging that the company's web designs tricked tens of millions of people into paying for Amazon Prime subscriptions that were difficult to cancel. According to court documents, Amazon will pay $1 billion in civil penalties to the government and another $1.5 billion in payments to affected consumers who paid for Prime between mid-2019 and mid-2025. The company's statement said it had "always followed the law" and that the settlement allows it to "move forward and focus on innovating for customers." The lawsuit, filed in 2020, accused Amazon of using deceptive design tactics to make it hard for consumers to cancel their Prime subscriptions. The government alleged that Amazon's website made it difficult for users to find information about cancellation policies and that the company used "dark patterns" – manipulative design techniques – to keep customers subscribed. "We are pleased that this settlement holds Amazon accountable for its practices," said a spokesperson for the U.S. Department of Justice, which led the lawsuit. "This agreement ensures that millions of consumers will receive compensation for their losses and that Amazon will take steps to improve its business practices." Amazon's statement emphasized that it had cooperated fully with the investigation and that the settlement was not an admission of wrongdoing. The company's Prime membership program has been a key driver of growth for Amazon, with over 200 million subscribers worldwide. However, critics have long argued that the program's design is manipulative and takes advantage of consumers who may not be aware of their subscription terms. Consumer advocacy groups welcomed the settlement as a victory for consumers. "This settlement shows that companies can be held accountable for their deceptive practices," said a spokesperson for the Consumer Federation of America. "We hope this sends a message to other companies that they must prioritize transparency and fairness in their business dealings." The settlement is one of the largest ever reached between a U.S. company and the government over consumer protection issues. It marks a significant victory for regulators who have been pushing for greater accountability from tech giants. As part of the agreement, Amazon will also implement changes to its website and customer service practices to make it easier for consumers to cancel their Prime subscriptions and understand their terms. The settlement is expected to be finalized in the coming weeks, with affected consumers set to receive compensation payments. The exact timeline for these payments has not been announced. In a statement, an Amazon spokesperson said the company was "pleased" with the settlement and that it would allow it to "continue innovating for customers." *Reporting by Npr.*