Month: September 2025

Amazon has agreed to pay $2.5 billion to settle a Federal Trade Commission lawsuit accusing the company of misleading customers into enrolling in Prime and making the cancellation process overly burdensome.

Under the settlement, announced Thursday, the company will pay $1 billion in civil penalties — the largest fine ever imposed by the FTC — and $1.5 billion in refunds to consumers. Those eligible for compensation include people who were signed up for Prime through the company’s “Single Page Checkout” between June 23, 2019, and June 23, 2025, without realizing it or who faced obstacles when trying to cancel. Amazon did not admit wrongdoing as part of the agreement and has not publicly responded to the settlement beyond court filings.

The settlement closes out a lawsuit brought in federal court in Seattle over two years ago by former FTC Chair Lina Khan under the Biden administration, who targeted Amazon’s use of “dark patterns,” accusing the tech giant of tricking users into enrolling in Prime subscriptions that renewed automatically. The lawsuit alleged that the retailer had spent more than a decade violating consumer protection laws. Among the violations cited was a breach of the Restore Online Shoppers’ Confidence Act, a 2010 law intended to ensure online shoppers are fully informed before being charged.

Prime, which costs $139 annually or $14.99 per month, is a central part of Amazon’s business model. Subscribers receive benefits such as free two-day shipping, access to Prime Video, and discounts at Whole Foods. The service has grown to more than 200 million members worldwide. In its most recent earnings report in July, Amazon said its subscription services, which include Prime along with music and e-book offerings, generated over $12 billion in revenue — a 12% increase from the previous year.

Amazon has defended its subscription practices, saying customers are clearly informed of Prime’s terms before being charged and that cancellation is straightforward via phone, online, or live chat. In a recent court filing, the company said, “Occasional frustrations and errors are unavoidable — especially for a program as widely used as Amazon Prime.”

The FTC, however, argued that Amazon intentionally made it difficult for customers to complete a purchase without also enrolling in Prime. In many cases, the agency said, customers were shown a button to finalize an order without being told it would also trigger a Prime subscription.  The FTC added that cancelling was equally problematic, with documents revealing that Amazon rejected or delayed design changes that would have simplified the process.

FTC Chair Andrew Ferguson called Thursday’s settlement a “record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.” The FTC is continuing, however, to pursue a broader antitrust case against Amazon.

Amazon spokesperson Mark Blafkin said in a statement that the company and its executives “have always followed the law” and that the settlement “allows us to move forward and focus on innovating for customers.” The e-commerce giant did not admit guilt, and the settlement did not require additional changes to its sign-up and cancellation process.

In her own statement, Khan called the $2.5 billion fine  a “drop in the bucket” for Amazon and “a big relief for the executives who knowingly harmed their customers.” She accused the FTC of “rescuing Amazon from likely being found liable for having violated the law.”

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The White House Office of Management and Budget (OMB) has instructed federal agencies to draw up plans for potential layoffs in case Congress fails to pass a spending bill by Tuesday, raising the stakes in the latest government funding standoff.

The memo from the Office of Management and Budget, first reported by Politico , points to job losses for certain federal employees if the government shuts down next week.  It advises agencies to prepare “reduction-in-force” notices — the official term for federal layoffs — for employees working in programs or projects that lose funding on October 1 or lack alternative financing. It also specifies that workers tied to initiatives not aligned with the president’s priorities should receive such notices. Traditionally, government shutdowns have resulted in temporary furloughs for non-essential staff, while employees in critical roles are asked to work without pay until funding resumes. Permanent layoffs are far less common.

According to the memo, these layoffs would come on top of furlough orders, which require federal employees to stay home without pay during a shutdown. The memo states: “programs that did not benefit from an infusion of mandatory appropriations will bear the brunt of a shutdown, and we must continue our planning efforts in the event Democrats decide to shut down the government.”

An OMB official clarified that several essential programs and services would not be affected, including Social Security, Medicare, veterans’ benefits, military operations, law enforcement, Immigration and Customs Enforcement, Customs and Border Protection, and air traffic control. These areas are funded by law and would not be subject to layoffs.

The memo closed with: “we remain hopeful that Democrats in Congress will not trigger a shutdown and the steps outlined above will not be necessary. The President supports enactment of a clean CR to ensure no discretionary spending lapse after September 30, 2025, and OMB hopes the Democrats will agree.”

Bobby Kogan, who previously worked at OMB under the Biden administration, condemned the move as reckless and said the mass firings would be “an action of enormous self-harm inflicted on the nation, needlessly ridding the country of talent and expertise. It’s also extortive. ‘Give us what we want in a funding fight, or we’ll hurt the country’”

Democrats on Capitol Hill also pushed back, with Senate Minority Leader Chuck Schumer of New York calling the memo “an attempt at intimidation.” Schumer wrote: “Donald Trump has been firing federal workers since day one — not to govern, but to scare. This is nothing new and has nothing to do with funding the government,” predicting that any laid-off workers will be hired back.

House Minority Leader Hakeem Jeffries, also a New York Democrat, echoed that sentiment on X, writing: “We will not be intimidated by your threat to engage in mass firings. Get lost.”‘

The government’s fiscal year ends on September 30, leaving just days for lawmakers to reach an agreement before a shutdown begins Wednesday. A short-term spending bill passed by House Republicans has stalled in the Senate, where it fell short of the 60 votes required to advance. With 53 Senate seats, Republicans will need support from at least seven Democrats to break the impasse. Democrats, however, are pressing for concessions, including reversing recent Medicaid cuts and extending health insurance tax credits, before they agree to a deal.

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