Amazon Faces Australian Federal Court Over Prime Video Ad Policy
Consumer watchdog alleges unfair contract terms led to mandatory advertising for subscribers.
Amazon Australia is facing legal action in the Federal Court, initiated by the nation's consumer watchdog, over the introduction of advertisements on its Prime Video streaming service. The Australian Competition and Consumer Commission (ACCC) confirmed Tuesday it has launched proceedings against Amazon AU, alleging the company breached Australian consumer law.
The ACCC contends that Amazon included unfair contract terms in its Prime subscription agreements and subsequently relied on these terms to implement advertising on Prime Video in July 2024. According to the lawsuit, over one million Prime subscribers were affected by contracts containing five unfair terms, which Amazon then used to justify the ad rollout. Subscribers who wished to retain an ad-free viewing experience after July 2024 were required to pay an additional $2.99 per month, on top of their existing annual subscription fee of $79.
"We allege that Amazon AU included multiple unfair terms in its contracts with Australian annual Prime subscribers, and it then relied on some of these terms to bring ads onto Amazon Prime Video," stated ACCC Chair Gina Cass-Gottlieb. "Consumers who wanted to avoid ads were left with no choice but to pay more to maintain the service they'd initially signed up for."
The watchdog is seeking penalties and consumer redress from Amazon. The ACCC launched its investigation into Amazon AU's contracts following consumer complaints regarding the introduction of ads to Prime Video.
The ACCC's legal action also suggests involvement from Amazon US in drafting the Australian contracts and in the global decision to introduce advertising to the service. "All businesses are required to balance rights and obligations in their standard form contracts with consumers to ensure they are fair," Cass-Gottlieb added.
An Amazon Australia spokesperson indicated that the company is reviewing the Federal Court case in detail. "We have cooperated with the ACCC throughout its investigation and remain focused on providing the best experience for our Australian customers," the spokesperson said.