Amazon to Refund $1.5 Billion To Customers in Prime Scam Case Settlement

Amazon.com Inc. has agreed to refund $1.5 billion to customers as part of a $2.5 billion settlement with the U.S. Federal Trade Commission (FTC) over allegations that it misled millions into signing up for its Prime subscription service and made cancellation unnecessarily difficult.

Under the deal, announced just days after jury selection began in a Seattle federal court, Amazon will also pay $1 billion in civil penalties and commit to simplifying its Prime cancellation process.

The FTC accused Amazon of using “dark patterns”—design tactics that nudged users into enrolling in the $139-a-year Prime membership without clear consent. Regulators also alleged that the company intentionally created a convoluted opt-out process, frustrating customers who wanted to cancel.

Settlement Details

• Refunds will go to consumers tricked into Prime subscriptions.

• Amazon executives Neil Lindsay and Jamil Ghani are barred from engaging in similar practices.

• Amazon has not issued a public comment on the settlement.

Prime remains a cornerstone of Amazon’s business model, offering perks such as free shipping, streaming services, and exclusive discounts. As of March 2025, an estimated 196 million U.S. households subscribed to Prime, up 9% year-on-year.

In Q2 2025, Amazon reported $12.2 billion in subscription revenue, mostly from Prime, reflecting an 11% year-on-year increase.

Regulatory Pressure on Tech Giants

The settlement highlights growing scrutiny of U.S. tech giants. While the current administration has called for a “light touch” on AI regulation, companies like Amazon and Meta continue to face regulatory battles with the FTC.

Impact on Global Markets

Amazon Prime and Netflix are the most popular subscription-based streaming platforms in Nigeria. However, rising subscription costs have pushed many Nigerians toward freemium platforms like YouTube. In 2024, Amazon cut its budgets for African and Middle Eastern content, signaling a shift in focus toward European originals. The restructuring led to staff layoffs in Sub-Saharan Africa and the MENA region.