As part of the settlement, Amazon agreed to refund $1.5 billion to 35 million Prime members.
Amazon was in court against the FTC with allegations that it tricked millions of customers into Prime subscriptions by not clearly disclosing terms and conditions and making it intentionally complicated for customers to cancel their subscription service.
The FTC claimed that Amazon’s actions violate the Restore Online Shopper’s Confidence Act (ROSCA). Amazon countered that its practices were designed to enhance the customer experience, and it is not required under ROSCA to actively promote its cancellation process.
Oral arguments began on Tuesday, September 23, 2025, in the Western District of Washington in Seattle. On Thursday, September 25, the two sides settled for $2.5 billion.
What Is ROSCA?
The Restore Online Shoppers' Confidence Act (ROSCA) is a U.S. law designed to protect online shoppers from being roped into recurring payments or subscriptions that they don’t want. ROSCA was created in response to negative option marketing, which means that if a consumer did not affirmatively say “no” to an offer, the company would automatically opt them into a recurring payment or subscription, often without the consumer realizing it.
How Does ROSCA Protect Online Shoppers?
ROSCA has provisions designed to protect online consumers from unauthorized or unwanted recurring charges or subscriptions. The ROSCA rules require companies to:
- End misleading subscription practices to get consumers to agree to recurring payments.
- Provide disclosures of all costs and terms of the subscription before getting billing information.
- Get the consumer’s affirmative consent for recurring payment before enrollment.
- Provide a simple cancellation process.
Why Is the FTC Involved?
The Federal Trade Commission (FTC) is an independent agency of the US government responsible for protecting consumers against deceptive, unfair, or anticompetitive business practices. They investigate claims of fraud, antitrust violations, and false advertising. They also enforce the ROSCA Act.
In recent years, the FTC investigations have successfully targeted companies in violation of the ROSCA Act.
- The FTC sued First American Payment Systems in 2022 and settled for $4.9 million for false claims of fees and savings, and having contracts with surprise exit fees.
- In 2024, the FTC required cash advance provider “FloatMe” to provide $3 million for consumer refunds and to change its deceptive advertising.
- In 2024, the FTC initiated a lawsuit against Adobe for deceptively concealing early termination fees for its annual paid monthly subscription.
Why Was The FTC Going After Amazon?
The FTC’s complaint accused Amazon of purposefully signing up consumers for the Prime program without their knowledge. Prime provides free shipping and access to streaming services. On the Amazon site, there is a large yellow “Get FREE Two-Day Shipping” button.” If a consumer selected that over a smaller blue hyperlink, “No thanks, I do not want fast, free shipping,” they would be enrolled in Prime. Prime membership is $14.99 per month.
The FTC case further alleged that the cancellation of Prime was unduly burdensome, involving a “four page, six click, fifteen-option” cancellation process. The FTC contrasted this multi-step task to the two clicks involved in enrolling the customer in Prime.
They noted in the complaint, “Fittingly, Amazon named that process 'Iliad,' which refers to Homer’s epic about the long, arduous Trojan War.” They described how executives rejected the notion of simplifying the cancellation practice because it would affect their “bottom line.”
Who Is Affected By This Settlement?
An expert witness for the FTC estimated that 40 million people were duped into Amazon Prime subscriptions or were unable to cancel their subscriptions due to the many steps involved in the cancellation process. Ultimately, the two sides agreed to refunds for 35 million people. The lawsuit was filed against Amazon and three of its executives. In addition to the $1.5 billion in refunds, Amazon has to pay a fine of $1 billion.
The settlement came as a bit of a surprise just three days into the trial. Amazon admitted no wrongdoing as part of the settlement, which is not unusual in this type of case, but did agree to clarify the terms of the Prime program during enrollment. Prime memberships should also be easier to cancel in the future.
Related Resources
- Find a Consumer Protection Attorney Near Me (FindLaw Attorney Directory)
- Consumer Protection Law (FindLaw Learn About the Law)
- Tips for Safe Online Shopping (FindLaw Learn About the Law)
