Amazon Will Pay $2.5 Billion to Settle FTC Suit That Alleged ‘Dark Patterns’ in Prime Sign-Ups

In a historic settlement, Amazon has agreed to pay $2.5 billion to the Federal Trade Commission to resolve a lawsuit that alleged the tech giant used “dark patterns” to make it difficult for customers to cancel their Prime subscriptions. The FTC alleged that Amazon’s Prime sign-up process was intentionally designed to confuse and frustrate users, leading many to unintentionally sign up for the service and continue paying for it without their clear consent.

As part of the settlement, Amazon has agreed to make significant changes to its Prime sign-up process, including providing clearer information about subscription terms and making it easier for customers to cancel their memberships. The company will also be required to set up a $2.5 billion fund to compensate customers who were misled by the deceptive practices.

FTC Chair Lina Khan hailed the settlement as a “landmark victory for consumers,” stating that it sends a strong message to companies that engage in deceptive practices. “This settlement shows that even the largest tech companies are not above the law and must be held accountable for their actions,” Khan said.

Amazon, however, has denied any wrongdoing and stated that it agreed to the settlement to avoid a protracted legal battle. The company maintains that its Prime sign-up process is clear and transparent and that it has always strived to provide a positive experience for its customers.

The settlement is one of the largest ever reached between a tech company and the FTC and is expected to have far-reaching implications for how companies design their subscription services. It serves as a reminder that companies must be transparent and honest in their dealings with customers and that deceptive practices will not be tolerated.

Overall, the settlement marks a significant win for consumer protection advocates and sets a precedent for holding tech giants accountable for their actions. As Amazon pays out billions to settle the suit, it serves as a reminder that no company is above the law when it comes to protecting consumer rights.