Amazon reached a record $2.5 billion settlement with the Federal Trade Commission on September 25, ending a case over its Prime subscription practices only days after a jury trial began in Seattle. The agreement includes $1 billion in civil penalties and $1.5 billion in consumer refunds, marking the largest rule-violation settlement in the agency’s history.

The outcome brings an abrupt conclusion to what had been expected to be a month-long trial in the U.S. District Court for the Western District of Washington. Regulators argued Amazon violated the Restore Online Shoppers’ Confidence Act, a 2010 law requiring companies to disclose charges and obtain express consent before billing. The central issue was whether the company’s design choices, described as “dark patterns”, crossed into unlawful deception by steering shoppers into Prime and complicating the process of cancellation.

According to the FTC, the scope of refunds included in the deal exceeded expectations. Chris Mufarrige, director of the Bureau of Consumer Protection, said the settlement showed Amazon recognized it was likely to lose once the trial began. Amazon denied wrongdoing but said it resolved the case to avoid years of litigation. “Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers,” spokesperson Mark Blafkin said.

The order requires Amazon to maintain clear disclosures and obtain explicit consent for any subscription charges. The company must also provide a straightforward cancellation process and ensure automatic renewals are prominently identified. Certain Prime customers will receive automatic refunds of up to $51 if they enrolled through specific checkout links between 2019 and 2025, while a claims process will be available for more than 30 million others. Refunds are expected to be distributed within 90 days.

The case was built on allegations outlined in the FTC’s 2023 complaint, which accused Amazon of steering shoppers into Prime with misleading prompts and requiring a lengthy cancellation process that employees internally referred to as the “Iliad.” Regulators said executives delayed or rejected changes that would have made cancellation easier, citing concerns over lost revenue.

Prime remains central to Amazon’s business model, offering shipping perks, streaming, and grocery discounts for $139 annually or $14.99 monthly. In its most recent financial report, the company disclosed more than $12 billion in subscription revenue for the quarter, reflecting a 12 percent increase from the prior year.

The investigation began in 2021 and was formally filed in 2023 under FTC Chair Lina Khan, who has also directed an antitrust case against Amazon scheduled for trial in 2027 before the same judge, John Chun.

The $2.5 billion resolution is the largest FTC penalty tied to subscription practices and follows the $5 billion fine against Facebook in 2019 for privacy violations.