Australia Sues Amazon Over Allegedly Unfair Prime Video Contract Terms

Australia's consumer watchdog has filed a lawsuit against Amazon, alleging the tech giant implemented unfair contract terms in its Prime Video service. The Australian Competition and Consumer Commission (ACCC) asserts that Amazon violated consumer protection laws by introducing advertisements and charging an additional fee for an ad-free experience to more than a million annual subscribers between November 2023 and August 2025.

According to the ACCC, consumers who wished to avoid ads were compelled to pay more to retain the service they initially subscribed to. "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," stated ACCC chair Gina Cass-Gottlieb.

Prime Video, which had been offered as a commercial-free streaming service included with Amazon's Prime subscription for over a decade, began rolling out advertising globally in early 2024. In Australia, Amazon informed subscribers that they would need to pay an extra monthly fee to continue receiving ad-free service, increasing the monthly cost to 12.99 Australian dollars. At that time, the ACCC noted that over 850,000 individuals in Australia had already prepaid for a year of the Prime service.

"Those subscribers were provided with a degraded, ad-supported Prime Video service for the balance of their prepaid term unless they paid for the ad-free option," the ACCC detailed in its filing. The commission further stated that Amazon relied on five unfair terms within contracts with over a million customers to implement these changes. These contract terms allegedly allowed Amazon Australia to unilaterally alter its services, including Prime Video, without providing subscribers with refunds or other meaningful recourse.

This action in Australia is not the first time Amazon's practices have faced regulatory scrutiny. In the United States, the Federal Trade Commission (FTC) has previously taken legal action against Amazon, citing allegations that the company enrolled individuals in Prime subscriptions without their consent and made it difficult to cancel them. Additionally, Amazon recently agreed to pay an FTC fine to resolve claims that it created significant obstacles for victims of online shopping fraud. In the United Kingdom, Amazon has also been investigated for its methods of listing products and the prevalence of fake reviews.