Amazon's Hefty $2.5 Billion FTC Settlement: A Painless Payout

Amazon.com will pay $2.5 billion to settle claims by the Federal Trade Commission (FTC) that it misled Prime subscribers. This settlement includes $1.5 billion for customer payouts and a $1 billion FTC fine. While significant, Amazon's sales volume makes this a manageable expense.

Amazon.com is set to settle Federal Trade Commission allegations with a $2.5 billion financial package, addressing concerns that it misled users into Prime subscriptions. While the settlement represents a significant consumer win, the financial impact on Amazon appears minimal, comparable to 33 hours of its regular sales revenue.

The agreement ensures payouts for roughly 35 million Prime users from a $1.5 billion fund, alongside a $1 billion penalty to the FTC. Consumers able to document difficulties in subscription cancellation are also eligible for claims. However, Amazon officials maintain the settlement doesn't acknowledge any legal wrongdoing on their part.

As part of the agreement, Amazon will enhance the clarity of its Prime subscription processes, including implementing a conspicuous declination button. The FTC highlights this deal as its second-largest settlement, reinforcing its stringent approach towards big-tech companies, although the market impact on Amazon's Prime membership appears limited.

(With inputs from agencies.)