Amazon has agreed to pay $2.5 billion to settle a lawsuit from the Federal Commerce Fee (FTC) over allegations that it duped customers into paying for Prime subscriptions and made it arduous to cancel memberships.

The corporate shall be required to pay a $1 billion civil penalty and supply $1.5 billion in refunds to an estimated 35 million shoppers harmed by the corporate’s “misleading Prime enrollment practices,” the FTC says. Amazon can also be required to cease its “illegal enrollment and cancellation practices.”

The go well with, filed in June 2023 beneath the Biden administration, claimed that Amazon created complicated and misleading consumer interfaces to steer shoppers to enroll in Prime with out their information. It additionally created a posh course of for shoppers trying to cancel their subscription by making them undergo pointless steps, the FTC alleged.

The settlement comes as Amazon and the FTC had simply begun the trial this week, throughout which a jury was imagined to resolve the result.

“The proof confirmed that Amazon used subtle subscription traps designed to govern shoppers into enrolling in Prime, after which made it exceedingly arduous for shoppers to finish their subscription,” stated FTC Chairman Andrew N. Ferguson in a press launch. “At present, we’re placing billions of {dollars} again into People’ pockets, and ensuring Amazon by no means does this once more.”

As a part of the settlement, Amazon is required to incorporate a transparent button for patrons to say no signing up for Prime. Which means that the corporate can not have a button that claims “No, I don’t need free delivery.”

Amazon should additionally clearly disclose the subscription value throughout the enrollment course of, together with the billing date and frequency, whether or not the subscription auto-renews, and the process for cancellation. Moreover, the corporate is required to create a simple approach for shoppers to cancel Prime, utilizing the identical methodology that customers used to join the service.

“Amazon and our executives have at all times adopted the regulation and this settlement permits us to maneuver ahead and concentrate on innovating for patrons,” Amazon stated in a press release. “We work extremely arduous to make it clear and easy for patrons to each join or cancel their Prime membership, and to supply substantial worth for our many hundreds of thousands of loyal Prime members around the globe. We’ll proceed to take action, and stay up for what we’ll ship for Prime members within the coming years.”

The settlement is among the largest within the FTC’s historical past. In 2019, Fb (now Meta) reached a $5 billion settlement with the company for violating shoppers’ privateness.

It’s value noting that Amazon nonetheless faces one other federal lawsuit, during which the FTC has accused the corporate of illegally stifling competitors on its method to turning into a ubiquitous retail presence and one of many world’s most beneficial firms.