Online retailer Amazon has agreed to pay $US2.5 billion to settle accusations by a US regulator that it signed up people to the Prime streaming platform without their consent.
The Federal Trade Commission (FTC) alleged millions of consumers were enrolled in Prime subscriptions without their consent, and Amazon knowingly made it difficult for consumers to cancel.
Amazon will be required to pay a $1 billion civil penalty and provide $1.5 billion in refunds to consumers harmed by the “deceptive” practices.
“The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription,” said FTC Chairman Andrew N. Ferguson.
“Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again.”
The commission said documents discovered in the lead up to trial showed that Amazon executives and employees made comments including “subscription driving is a bit of a shady world” and leading consumers to unwanted subscriptions is “an unspoken cancer”.
As part of the settlement, Amazon can no longer have a button that says: “No, I don’t want Free Shipping.”
Spokesperson Mark Blafkin said Amazon worked "incredibly hard to make it clear and simple" for customers to both sign up or cancel their Prime membership.
"Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers," he said.
Prime has more than 200 million members globally. It costs $9.99 a month in Australia.
Amazon reported advertising revenue up 23% to $US15.694 billion in the June quarter. The company is now the world’s third largest advertising player after Google and Meta.
The company's advertising business in Australia lifted net sales 58% to $242.5 million in the year to December, according to data lodged with corporate regulator ASIC.
And more than 5 million Australians are each month seeing ads on Prime.
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