Amazon to pay $2.5bn for allegedly duping millions to sign up for Prime
Summary
Amazon agreed to pay $2.5 billion to settle a claim by the Federal Trade Commission (FTC). The FTC accused Amazon of misleading customers into signing up for Prime memberships and making it difficult to cancel. Amazon will pay $1 billion in penalties and $1.5 billion to affected customers.Key Facts
- Amazon settled a case with the FTC for $2.5 billion.
- $1 billion is a penalty, and $1.5 billion will go to customers who were signed up for Prime by mistake or had trouble canceling.
- This settlement is the largest fine for a rule violation in the FTC's history.
- The case involved the Restore Online Shoppers’ Confidence Act, a law to protect online buyers.
- Amazon claimed it followed the law but chose to settle to avoid a long legal process.
- Certain customers will automatically receive up to $51, and a claims process will be set up for more than 30 million affected customers.
- Amazon Prime includes benefits like faster shipping and video streaming for a fee.
- The settlement had little impact on Amazon's stock price as the company earns $2.5 billion approximately every 33 hours.
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