FTC Unmasks Amazon's Dark Patterns in $2.5B Consumer Redress Deal

The Federal Trade Commission (FTC) has secured a record $2.5 billion settlement with Amazon.com, Inc., marking one of the largest penalties in the agency’s history. The agreement addresses allegations that Amazon used deceptive practices to enroll millions of consumers in Prime subscriptions without their consent and deliberately complicated cancellation processes. Under the terms, Amazon will pay a $1 billion civil penalty—the highest ever for an FTC rule violation—and distribute $1.5 billion in refunds to affected customers. The settlement also mandates operational changes to Prime’s enrollment and cancellation workflows FTC Secures Historic $2.5 Billion Settlement Against Amazon^[1].

The FTC’s case, filed in 2023 under former Chair Lina Khan, accused Amazon of violating the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) through “dark patterns” in its user interfaces. These tactics, according to the agency, included misleading buttons like “No, I don’t want Free Shipping,” which covertly enrolled users in Prime subscriptions. Internal Amazon documents revealed executives acknowledged the issue, with one referring to subscription practices as “a bit of a shady world” and another calling unwanted enrollment “an unspoken cancer.” The agency also highlighted Amazon’s “Iliad Flow,” a multi-step cancellation process that required users to navigate up to six pages with persuasive messaging to discourage unsubscribing Amazon to pay $2.5 billion to settle FTC allegations it duped…^[2].

Amazon denied wrongdoing in the settlement, stating it adhered to industry standards and that most customers voluntarily enrolled in Prime for its benefits. The company emphasized that it offers multiple cancellation methods, including phone and online options. However, the FTC countered that Amazon’s practices intentionally obscured terms such as auto-renewal and subscription costs during enrollment. The settlement requires Amazon to overhaul its processes, including replacing ambiguous buttons with clear decline options, providing full transparency on subscription terms, and simplifying cancellation to match the method used for enrollment. An independent third party will monitor compliance with the redress distribution Amazon, FTC Agree To $2.5B Settlement In Prime ^[3].

The case impacts an estimated 35 million consumers who may have been enrolled between June 2019 and 2025 via Amazon’s “Single Page Checkout.” Refunds will prioritize those who were enrolled without consent or faced barriers to cancellation. The $1.5 billion in redress is the second-largest restitution award in FTC history, trailing only a 2019 $5 billion Facebook settlement over privacy violations. The settlement also names two senior executives—Neil Lindsay and Jamil Ghani—as jointly liable, a rare move that underscores the FTC’s focus on individual accountability FTC is suing Amazon for making Prime Subscriptions tough to…^[4].

The resolution follows a partial pretrial victory for the FTC in August 2025, when a judge ruled that Amazon violated consumer protection laws by collecting payment information before disclosing Prime’s terms. The trial, initially expected to last a month, was abandoned after the settlement was reached. While the agreement resolves the subscription dispute, Amazon faces a separate FTC antitrust lawsuit alleging monopolistic practices, set for trial in 2027. The settlement’s impact could extend beyond Amazon, as it sets a precedent for regulating “dark patterns” in digital commerce. A 2024 study found 76% of subscription services use similar tactics to retain users, suggesting broader implications for consumer protection enforcement Why Amazon is on trial for its deceptive ‘Iliad Flow’…^[5].