Amazon Prime users score unexpected break | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

It’s no secret that Amazon’s (AMZN) power-packed strategy runs on Prime.

It’s a robust flywheel of recurring fees that anchors demand and lifts higher-margin businesses around it. Last quarter, “subscription services” sales, including Prime, came in at a whopping $12.2 billion, underscoring the depth of Amazon’s growth engine.

Prime’s value stack makes quitting hard, with fast delivery on millions of items, streaming entertainment, reading and gaming perks, pharmacy, and grocery benefits. Traffic typically surges around its marquee two-day events called Prime Day, which advertisers continue to chase.

That said, regulators have looked closely at how Prime memberships are presented and sustained, focusing clearly on clarity, consent, and retention flows.

There’s been a massive development in that review, which could potentially change how subscriptions operate on Amazon, while translating to meaningful wins for customers.

A U.S. judge has handed Amazon Prime users a big win.

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Prime users notch a major legal win

Amazon Prime customers just scored a massive win this week after a U.S. judge ruled that it had violated consumer protection law in signing up new members.

The court found Amazon collected billing details before revealing full Prime terms, breaching the Restore Online Shoppers Confidence Act (ROSCA) in the process.

Key facts from the Amazon Prime court case so far:

Judge John Chun ruled Amazon violated ROSCA.
The FTC lawsuit over Prime signups can proceed.
Two executives could be held personally liable.
Amazon has categorically denied any wrongdoing, citing clear terms and simple cancellations.

Regulators now have the green light to move forward with claims that Amazon enrolled people without the proper consent.

It also challenges the company’s defense that the existing law doesn’t apply to the current signup process. For customers, that also opens the door for stronger protections on how its subscriptions are marketed and billed.

The Federal Trade Commission (FTC) believes that Amazon made cancellations unnecessarily difficult, which left many subscribers stuck. The judge agrees that the case has merit and ruled that two executives may be held liable if the violations are proven.

For customers, the FTC “intends to make them whole,” but the compensation depends on the trial outcome.

Prime is central to Amazon’s growth story

Prime is mission-critical to Amazon’s sticky subscription engine, feeding multiple profit streams.

The fees generated are booked in “subscription services,” and greater engagement effectively lifts ads and marketplace take rates. Also, it’s important to note that Amazon groups Prime fees with digital content under “subscription services.”

For perspective, In Q2 2025, subscription services sales were at $12.21 billion, up 12% year over year, which highlights a recurring top line that shows steady compounding. That’s more than double what it was posting in the same quarter, roughly five years ago.

Additionally, engaged members on Amazon tend to shop more often and are likely to see a lot more sponsored placements, driving advertising services to $15.69 billion in Q2, up 23% year-over-year, which is one of Amazon’s fastest-growing, higher-margin businesses.

Third-party seller services also grew to $40.35 billion (up a superb 11% year-over-year), benefiting from sustained Prime-led demand.

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Also, companywide net sales hit a whopping $167.7 billion in Q2, with Prime Day billed as the company’s biggest ever, underscoring the importance of membership events to concentrate traffic and ad spend. For perspective, Amazon stock is up a remarkable 18.3% in the past six months, beating the S&P 500’s 16% return over the same period.

Moreover, if the recent court verdict enforces clearer consent and easier cancellations, Amazon’s conversion numbers are likely to dip while increasing churn in the process.

It also pressures subscription growth and the ad/3P flywheels, which depend on engagement numbers.