To address allegations made by the US government that it deceived millions of people into becoming Prime members and made it difficult for them to cancel, Amazon has agreed to pay $2.5 billion (£1.9 billion).
According to the proposed settlement released by the Federal Trade Commission (FTC), a total of $1.5 billion will be used to reimburse consumers who were tricked into signing up for the program.
The agreement was reached a few days after the Seattle jury trial got underway. With the most significant civil penalty ever obtained by the FTC, it is a substantial win for the agency. Amazon did not immediately respond to a request for comment, nor did it acknowledge or refute the accusations.
Prime offers free shipping, movie streaming, and other benefits. The program, which costs $139 per year in the US (or $14.99 per month) and £95 per year in the UK, is used by hundreds of millions of individuals worldwide.
Amazon’s tactics, including pop-ups during checkout that kept urging customers to join up for Prime and collecting payment information without fully disclosing conditions or making it obvious how to decline the service, were the focus of the FTC’s investigation. They also criticised the firm for offering one-month Prime trials without making it clear that users would be enrolled automatically at the end of the month.
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