Amazon has finalized a $2.5 billion agreement with the Federal Trade Commission (FTC) regarding purported misleading practices associated with its Amazon Prime subscription service. In line with this agreement, Amazon is required to pay a $1 billion civil penalty to the U.S. government. The leftover $1.5 billion will establish a Consumer Fund intended to reimburse impacted Amazon Prime users.

Around 35 million users qualify for the $1.5 billion fund, translating to an estimated refund of $42.86 per individual if the amount is evenly allocated.

The FTC’s legal action against Amazon centered on the Prime subscription service, claiming that Amazon employed misleading designs, referred to as dark patterns, to sign users up for the paid service and made the cancellation process challenging. Not all Prime subscribers qualify for refunds.

Eligibility requirements encompass signing up for Prime between June 23, 2019, and June 23, 2025, through one of the “challenged enrollment flows,” which include the Universal Prime Decision Page, the Shipping Option Select Page, the Prime Video enrollment process, or the Single Page Checkout. Moreover, users must have utilized their Prime benefits no more than three times within the initial year of signing up.

Refunds will be distributed in two methods. Eligible consumers will automatically obtain a payout within 90 days, limited to $51, without needing to enroll. Following these payouts, Amazon will dispatch claims forms within 30 days to other qualifying customers who availed up to 10 Prime benefits in a 12-month timeframe. Consumers have a 180-day period to submit the claim form, and refunds will be processed within 30 days after evaluation.

If less than $1 billion is disbursed following the second phase, Amazon is obliged to keep making more customers eligible for refunds, including those who did not file a claim but registered through a challenged flow and used up to four Prime benefits, continuing until at least $1 billion is disbursed from the Consumer Fund.