Amazon.com Inc. agreed to pay $2.5 billion in penalties and refunds and change its process for how to cancel its Prime subscription to settle a lawsuit by the U.S. Federal Trade Commission.

The company will pay $1 billion in civil penalties and will refund $1.5 billion to customers to resolve allegations that it misled millions of customers into signing up for Prime and then making it intentionally difficult to cancel, according to FTC officials.

Amazon didn’t immediately respond to a request for comment.

The FTC, which enforces antitrust and consumer protection laws, sued Amazon and three executives in 2023 saying Amazon’s tactics violated a 2010 consumer protection law designed to protect online shoppers. As part of the settlement Amazon and two of its executives, Neil Lindsay and Jamil Ghani will be prohibited from engaging in the unlawful conduct.

The largest U.S. tech companies have been cozying up to the White House since President Donald Trump’s return to office in a bid to resolve regulatory scrutiny at home and abroad. Those efforts have been mixed, with the White House urging a light touch on AI while companies such as Meta Platforms Inc. have so far failed to settle their cases with the FTC.

The FTC case against Amazon focused on the company’s Prime subscriptions, which are a key part of Amazon’s success, with members spending more money and shopping more frequently than non-members.

Prime members pay $139 a year, or $15 per month, for shipping discounts, video streaming and other benefits. About 196 million people in the U.S. had Prime memberships as of March, up 9% from a year earlier, according to market research firm Consumer Intelligence Research Partners. The figure reflects the number of people in the U.S. living in households with Prime subscriptions, which are often shared by family members, and not the number of subscriptions sold.

Amazon had $12.2 billion in subscription services revenue, mostly from Prime memberships sold globally, in the quarter ended June 30, up 11% from the same period a year earlier.

The settlement came three days after the two sides picked a nine-person jury in federal court in Seattle to decide whether Amazon and the executives were liable. The company could have faced penalties and refunds in the multiple billions of dollars if it lost at trial.

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