Australia sues Amazon over unfair Prime Video contract terms
Australia's consumer watchdog has launched legal action against Amazon, alleging that the tech giant used unfair contract terms to introduce advertising on its Prime Video streaming service without offering refunds to subscribers.
The Australian Competition and Consumer Commission (ACCC) filed the lawsuit on Tuesday, claiming that Amazon violated consumer protection laws by making unfair contracts with over one million annual subscribers between November 2023 and August 2025.
According to the ACCC, Amazon added advertisements to Prime Video in early 2024, requiring subscribers who wanted to avoid ads to pay an additional monthly fee. This increased the monthly cost to AU$12.99 for ad-free access.
ACCC Chair Gina Cass-Gottlieb stated: “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 regulator noted that over 850,000 people had already paid for a full year of Prime service before the change, and were provided with a “degraded, ad-supported Prime Video service unless they paid extra.”
The ACCC identified five specific contract terms that it argues allowed Amazon to unilaterally make material adverse changes without providing subscribers any right to a refund or other meaningful redress. These terms were included in contracts with over a million customers.
An Amazon spokesperson said the company is “reviewing the case filed by the ACCC in detail” and noted that it has cooperated with the investigation. “We remain focused on providing the best experience for our Australian customers,” the spokesperson added.
Prime Video was launched as an ad-free service included with Amazon's Prime subscription, which bundles delivery and other perks. Prime became available in Australia in 2018, and the introduction of ads globally began in early 2024.
Amazon has previously faced regulatory scrutiny in other countries. In the United States, the Federal Trade Commission sued Amazon for allegedly enrolling users in Prime without consent and making cancellation difficult. Amazon also recently agreed to pay a fine to settle claims it created a frustrating process for online fraud victims. In the United Kingdom, authorities have investigated Amazon's listing practices and the prevalence of fake reviews.
