*

Settlement includes $1.5 billion fund for Prime subscriber

reimbursements

*

Amazon ( AMZN ) to implement clearer subscription terms and

cancellation

options

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Customer payout is FTC's second largest

(Adds context on Amazon ( AMZN ) in paragraph 7, details on case in

paragraphs 8-10)

By Jody Godoy

Sept 25 (Reuters) - Amazon.com ( AMZN ) will pay $2.5

billion in fines and reimbursements to Prime subscribers to

settle the Federal Trade Commission's allegations that it

deceived its customers to generate subscriptions, the FTC said

on Thursday.

Around 35 million Prime customers will be eligible for payout

from a $1.5 billion fund, the FTC said. Amazon ( AMZN ) will pay $1

billion in fines to the FTC. The company did not admit

wrongdoing as part of the settlement.

Shares of Amazon ( AMZN ) were nearly unchanged after the news.

Customers who signed up for Prime between June 23, 2019 and June

23, 2025 via offers the FTC said were deceptive and did not use

more than three Prime benefits, such as Prime Video, in the year

after they signed up will automatically receive a $51 payout,

according to court documents.

The settlement also allows customers to submit claims for

payment if they tried to cancel Prime and failed during that

time.

Amazon ( AMZN ) said in a statement that the deal allows it to move

forward and focus on customers.

"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," the company said.

As part of the settlement, Amazon ( AMZN ) has agreed to create a

"clear and conspicuous" button to allow customers to decline a

Prime subscription, and to make it easier to cancel. Amazon ( AMZN ) has

also agreed to more clearly disclose the terms of a subscription

during the enrollment process and to pay for an independent,

third-party supervisor to monitor compliance.

The FTC announced the settlement days into a trial in Seattle

federal court, where the agency argued to a jury that Amazon ( AMZN )

sought to enroll members whether or not they wanted the service.

The FTC said its investigation showed Amazon ( AMZN ) executives and

employees discussed enrollment and cancellation with comments

like "subscription driving is a bit of a shady world" and

leading consumers to unwanted subscriptions is "an unspoken

cancer."

Amazon ( AMZN ) founder Jeff Bezos once said he wanted to make Prime so

compelling that consumers would feel they are "being

irresponsible" if they are not members.

Amazon ( AMZN ) introduced Prime in 2005 for $79 per year and has

steadily increased subscription fees, most recently to $139 in

2022. The program helped drive $23.9 billion in subscription

revenue in the first half of 2025, making it a key growth driver

for the company.

Amazon ( AMZN ) drove those recruits, the FTC said, by offering free

trials on its website using pitches such as: "Get FREE Same-Day

Delivery." But the FTC said Amazon ( AMZN ) had failed to clearly

disclose to customers that selecting that option would enroll

them in Prime and eventually result in monthly subscription

charges.

The FTC started probing Amazon's ( AMZN ) subscription practices

during President Donald Trump's first term and the case was

filed during Joe Biden's presidency.

The settlement is the second-largest restitution amount ever for

an FTC action, agency officials said, and represents a major win

for the FTC's tough-on-tech agenda, which began during the first

Trump administration.