The Amazon Prime logo is displayed connected the broadside of an Amazon transportation motortruck successful Richmond, California, connected June 21, 2023.
Justin Sullivan | Getty Images
Amazon volition wage $2.5 cardinal to settee Federal Trade Commission allegations that it duped users into paying for Prime memberships, the regulatory bureau announced Thursday.
The astonishment colony comes arsenic Amazon and the FTC were conscionable 3 days into the proceedings successful a Seattle national court. Opening arguments took spot connected Tuesday.
The lawsuit, filed by the FTC successful June 2023 nether the Biden administration, claimed that Amazon deceived tens of millions of customers into signing up for its Prime subscription programme and sabotaged their attempts to cancel it. Three elder Amazon executives were astatine hazard of being held individually liable if the assemblage sided with the FTC.
Amazon volition wage a $1 cardinal civilian punishment to the FTC and volition refund $1.5 cardinal to an estimated 35 cardinal customers who were impacted by "unwanted Prime enrollment oregon deferred cancellation," the bureau said.
The FTC said the statement prohibits Amazon from misrepresenting the presumption of Prime. It besides requires the institution to marque wide and conspicuous disclosures astir the presumption of the programme during enrollment, and it requires Amazon to get consumers' explicit consent earlier charging them for a subscription. Amazon indispensable besides supply an casual mode for users to cancel their subscription, the bureau added.
As portion of the agreement, Amazon and 2 of its executives, Prime brag Jamil Ghani and Neil Lindsay, a elder vice president successful the company's wellness part who antecedently held a relation successful the Prime business, volition beryllium prohibited from unlawful conduct.
FTC Chairman Andrew Ferguson called the punishment a "monumental win" for the bureau nether the Trump administration.
"The Trump-Vance FTC is committed to warring backmost erstwhile companies effort to cheat mean Americans retired of their hard-earned pay," helium said successful a statement.
Representatives for Amazon didn't instantly respond to a petition for comment.
The punishment is 1 of the largest ever imposed by the FTC. The bureau in 2019 deed the institution past known arsenic Facebook with a $5 cardinal good for violating consumers' privacy.
Still, the $2.5 cardinal good is equivalent to astir 0.1% of Amazon's marketplace cap, which present sits astatine adjacent to $2.4 trillion. Shares of Amazon were up somewhat pursuing the announcement.
Launched successful 2005, Amazon's Prime programme has grown to go 1 of the astir fashionable subscription services successful the world, with much than 200 cardinal members globally, and it has generated billions of dollars for the company. Membership costs $139 a twelvemonth and includes perks similar escaped shipping and entree to streaming content. Data has shown that Prime members walk much and store much often than non-Prime members.
This is breaking news. Please refresh for updates.
English (US) ·