Amazon Faces ACCC Lawsuit Over Prime Video Ads
Synopsis
Australia's competition regulator has taken Amazon to the Federal Court, alleging unfair contract terms allowed changes to Prime Video subscriptions after customers had already paid, leaving annual members to pay extra to continue watching without advertisements.
Australian consumers have already seen Amazon caught up in unfair terms of contracts, even by introducing advertising on Prime Video while still forcing some members to pay a monthly fee for the service without the advertisements.
The ACCC (Australian Competition and Consumer Commission) alleged to have used unfair contract terms to offer advertising on its video service, forcing loyal consumers that pay for an annual Prime membership to continue to pay an increased cost monthly if they were still to continue watching the service without advertisements.
Standard year-long subscription Amazon contracts, introduced between November 2023 and August 2025 (2025 inclusive) allegedly contained a selection of unfair terms which would see the provider cut or amend the benefits received by a subscriber, with them not being given a way to terminate their subscriptions without repercussions.
Court proceedings on annual Prime members
The case centered on Amazon’s move to inject advertising into its streaming service, Prime Video, a development planned for July 2024 which would have seen consumers that paid for a 12 month Prime service in a single lump payment at the onset, to then add a further fee of A$2.99 each month if to have removed any ads.
The Commission believed over a million annual members across Australia were impacted, seeking court sanctions, compensation and other court-imposed measures. Amazon.com Services LLC allegedly helped draft said contracts on Australian behalf.
ACCC Chair Gina Cass-Gottlieb noted that it was unacceptable for consumers who have pre-paid for their annual streaming subscription to see the reduction of perks throughout that period, and called the terms disparate as they allegedly favored the company alone.
Amazon responded by indicating that they’ve had interactions with the ACCC throughout the process and are still looking at current proceedings. The focus on other businesses within the greater streaming industry is building steam, so to speak.
Broader Industry Shift Draws Regulatory Attention
The Australian consumer watchdog's focus is also on larger changes being observed throughout the online and streaming platform market.
A total of Amazon's global operations now include additional regions for ad-enabled Prime Video services that have either already been rolled out (US, Canada, Mexico, Australia, Germany, France, Italy, and Spain) or will be released in 2024, with a number of consumers being given the option to add a premium subscription and keep their experience ad-free, though not the case this time in Australia with its contract terms currently being challenged in court.
This case is part of a larger move by several organizations to scrutinize subscription video services more widely.
Ad-supported subscriptions have already seen a growth in global share and offered a considerable source of extra funds for streaming providers aside from traditional subscription income, according to recent market analysis, with the global debate concerning this practice continuing as regulatory actions such as this continue to surface.
However, proceedings against Amazon are not in regard to their offering of advertising based streaming as a business model, but rather specifically challenging whether their existing contract laws are valid and adhere to current Australian consumer legislation.
Amazon remains one of the world’s most profitable digital streaming corporations, generating US$638 billion of net revenue in its 2024 reports along with US$59.2 billion in net profit, with a widespread global reach that spans across continents and markets such as North America and Asia Pacific.
Source: The West Australia
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
