Amazon Prime on Trial: FTC Says 40 Million Customers Misled

Amazon Faces Civil Trial Over Prime Membership Practices

The world’s largest subscription program is under the microscope. Amazon (NASDAQ: AMZN), the e-commerce giant with more than 200 million Prime members worldwide, is now facing a civil trial brought by U.S. regulators that alleges the company violated consumer protection laws in the way it marketed and managed its flagship Prime service.

The Allegations

At the heart of the case is the Federal Trade Commission’s (FTC) claim that Amazon used deceptive tactics to entice and retain subscribers. According to the FTC, nearly 40 million customers may have been affected by practices designed to make sign-up easier than cancellation. The Commission argues that AMZN knowingly created what it calls “dark patterns”—interfaces that steer users into actions they might not otherwise take, particularly when it comes to joining Prime and attempting to leave it.

The lawsuit seeks civil penalties, consumer refunds, and structural remedies that could reshape how Amazon manages its subscription platform. Regulators say this isn’t just about one company, but about setting precedent against anti-consumer practices as digital platforms increasingly rely on subscriptions for revenue.

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Tech Giants Under Scrutiny

AMZN is not alone in facing regulatory pressure. Over the past two years, Google and Meta have both been targeted by lawsuits focused on monopoly power, consumer privacy, and market dominance. The FTC and Department of Justice have taken a more aggressive stance against Big Tech, arguing that the largest platforms not only distort competition but also erode consumer rights.

For Amazon, the stakes are particularly high because Prime is central to its business model. Beyond free shipping, Prime integrates streaming, gaming, and exclusive deals, embedding the service into consumer shopping behaviour. This has made Prime one of the most successful loyalty programs in history, but also one of the most scrutinised.

Amazon’s Response

AMZN strongly denies the allegations. In a statement, the company argued that Prime’s terms have always been clear and that customers are provided with “straightforward and transparent options” to cancel their memberships at any time. Amazon emphasised that customer trust is a core principle of its business, suggesting the FTC’s claims misrepresent its practices.

The Investors Takeaway