'Drop in the Bucket': Lina Khan Rips Trump FTC for Giving Amazon a Wrist-Slap Settlement

The Federal Trade Commission announced on Thursday it had reached a settlement with Amazon over allegations that the online retailer had tricked consumers into subscribing to its Prime service—but the woman who led the FTC under former President Joe Biden was not impressed.

According to the FTC, Amazon has agreed to pay $2.5 billion to settle claims that it deceived customers into subscribing to Prime and then deliberately made it difficult for them to cancel. In all, Amazon will pay a $1 billion civil penalty, as well as $1.5 billion in refunds to consumers who unwittingly subscribed to Prime.

FTC Chairman Andrew Ferguson framed the settlement as a victory for the Trump administration and touted the deal as "a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel." Ferguson also said the settlement would ensure "Amazon never does this again."

Amazon, for its part, said in a statement that it didn't break any laws despite agreeing to pay out billions.

"Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers," the company said. "We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world."

However, former FTC Chairwoman Lina Khan accused the agency of letting Amazon off easy, while describing the $2.5 billion settlement as a "drop in the bucket" for the tech giant.

"In 2023, we sued Amazon and several top executives for tricking people into Prime subscriptions and then making it absurdly difficult to cancel," she explained in a post on X. "This week marked the start of a historic jury trial, where American citizens would hear details of Amazon’s business practices and determine if it had broken the law. A couple of days into trial, FTC announces it has settled all charges, rescuing Amazon from likely being found liable for having violated the law and allowing it to pay its way out."

Khan added that the settlement was "no doubt, a big relief for the executives who knowingly harmed their customers."

Amazon currently has a market cap of over $2.3 trillion, meaning the $2.5 billion settlement represents a little more than one-tenth of 1% of its total worth. Its billionaire founder, Jeff Bezos, is among the richest people on Earth, with an estimated net worth of nearly $240 billion.

Matthew Stoller, an antitrust advocate and researcher at the American Economic Liberties Project, faulted the FTC for letting Amazon settle without any admission of wrongdoing.

"A judge already ruled in summary judgment they violated the law," Stoller observed.

Amazon may not be completely out of the woods legally, however.

As NPR noted on Thursday, Amazon "still faces another, bigger federal lawsuit, in which the FTC has accused the company of functioning as a monopoly." That trial is currently projected to begin in early 2027, NPR added.