Amazon has agreed to a $2.5 billion settlement with the FTC over allegations of deceptive Prime membership practices, including making cancellations difficult, which was announced just before the Prime Big Deal Days in early October.

The ongoing trial, which began with jury selection in Seattle and is expected to last about four weeks, is examining whether Amazon’s cancellation process is clear and conspicuous, with internal communications and expert witnesses being scrutinized.

Some consumers who used three or fewer benefits in a year may receive automatic payments within 90 days, while others will need to submit claims, with a website and claim forms provided for affected customers.

The case is part of a broader effort by the FTC to crack down on 'dark patterns'—deceptive design tactics—highlighting the use of manipulative user interfaces to deceive consumers into costly subscriptions.

Despite its legal challenges, Amazon's market cap remains high at $2.34 trillion, with its stock trading near a 52-week high, reflecting investor confidence amid sector-specific risks like regulatory scrutiny.

Financially, Amazon shows low bankruptcy risk with a high Altman Z-Score, but sector risks include intense competition and ongoing regulatory challenges, especially following the FTC settlement.

While Amazon's core retail business accounts for about 75% of revenue, its international markets and other segments like AWS and advertising contribute significantly, and its stock exhibits moderate volatility.

Key developments to watch include the trial's verdict and market reactions, which could influence investor confidence and public perception of Amazon’s practices.

The legal case also involves a separate monopoly-related lawsuit scheduled for 2027, indicating ongoing regulatory pressure on Amazon.

Experts believe Prime’s dominance in the market will remain unaffected despite the settlement, as the program is deeply embedded in American consumer habits.

The FTC's case underscores a global crackdown on 'dark patterns,' with similar actions taken against other major companies, emphasizing the importance of transparency in digital interfaces.

FTC Chairman Andrew Ferguson described the settlement as a 'monumental win' for consumers, marking a significant step in protecting against deceptive subscription practices.