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Amazon has agreed to refund eligible Prime customers in Arizona following a dispute over its subscription cancellation process.
Why Did Arizona Sue Amazon?
Arizona Attorney General Kris Mayes filed a lawsuit against Amazon in 2024, accusing the company of using unfair and deceptive practices that made cancelling Prime memberships unnecessarily difficult.
The complaint alleged that customers had to complete at least six separate steps to cancel their subscriptions before changes were introduced in 2023. The process, internally called “Project Iliad”, allegedly involved confusing screens, repeated prompts and wording designed to discourage cancellations.
According to the state’s legal filings, the cancellation system reduced cancellations by 14% at one stage because fewer customers reached the final confirmation page. Arizona authorities argued that consumers were not informed about these obstacles when signing up.
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What Does the Settlement Include?
Under the agreement with the Arizona Attorney General’s Office, Amazon will provide refunds to eligible consumers who encountered difficulties cancelling their Prime memberships.
The settlement also requires payments towards consumer fraud investigations, public education, legal expenses and charitable organisations providing food assistance. The consumer refunds will be administered through the Attorney General’s Office.
Amazon has denied wrongdoing and maintained that its business practices did not violate Arizona law. The settlement does not constitute an admission of liability by the company.
How Much Will Amazon Pay?
The settlement requires Amazon to pay approximately ₹65.75 crore in total, including ₹28.18 crore for consumer refunds, ₹14.09 crore for consumer fraud investigations and education, ₹14.09 crore for Arizona’s legal expenses and ₹9.39 crore for charitable organisations.
The refunds are intended for eligible Arizona residents who attempted to cancel their annual Prime memberships but encountered the disputed process. The settlement follows a separate agreement with the US Federal Trade Commission in 2025.
That earlier settlement totalled approximately ₹23,482 crore, comprising a civil penalty of ₹9,393 crore and consumer refunds of ₹14,089 crore. Amazon also agreed to simplify its subscription enrolment and cancellation procedures.
What Other Legal Challenges Does Amazon Face?
Arizona’s settlement forms part of broader regulatory scrutiny of subscription practices, particularly the use of interface designs that make cancellation more difficult than enrolment.
Attorney General Mayes has maintained that consumers should be able to cancel subscriptions as easily as they sign up. Her office intends to pursue refunds for eligible residents affected by the disputed cancellation arrangements.
Amazon also faces a separate lawsuit filed by Mayes in 2024 concerning how products are displayed on its website. The complaint alleges that its Buy Box favours offers generating higher fees for Amazon, potentially causing customers to pay more. Amazon disputes those allegations, and no hearing date has been set.
The Prime cancellation settlement addresses the Arizona allegations without a finding that Amazon violated state law. It also places renewed attention on consumer protection standards governing subscription services and online purchasing.
