The Australian Competition and Consumer Commission has sued Amazon over claims that it used unfair contract terms to introduce advertising to Prime Video. The regulator alleges that more than one million annual Prime subscribers were covered by contracts allowing Amazon to make negative changes without providing refunds or other meaningful remedies.
The Federal Court case concerns five terms included in contracts made between November 1, 2023, and August 18, 2025. The ACCC alleges that Amazon Australia later relied on one or more of those terms when it added advertisements to Prime Video in July 2024.
Annual Subscribers Faced an Additional Monthly Fee
Before the change, Prime Video was almost entirely free of advertising for customers with an Amazon Prime subscription. Subscribers who wanted to continue watching without ads were required to pay an additional A$2.99 per month.
More than 850,000 customers had already paid A$79 for a full year of Prime when the change was introduced, according to the ACCC. Those subscribers received the ad-supported version for the rest of their prepaid term unless they paid the additional monthly charge.
“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,” ACCC Chair Gina Cass-Gottlieb said.
The regulator said the five disputed terms allowed Amazon to change its services and the rules governing them without giving customers a contractual right to compensation. Its official announcement also alleges that Amazon.com Services helped draft the Australian contracts and was knowingly involved in the conduct.
ACCC Seeks Penalties and Customer Redress
The ACCC is asking the Federal Court to issue declarations, impose financial penalties and order consumer redress. It is also seeking legal costs and other orders against Amazon Australia and its U.S.-based affiliate.
The case is among the first contested actions brought under Australia’s updated penalties for unfair contract terms. The regime applies to qualifying contracts made or renewed from November 9, 2023.
Amazon said it had cooperated with the ACCC throughout the investigation and was reviewing the filing in detail. The company added that it remained focused on providing the best experience for customers in Australia.
Amazon began offering Prime in Australia in 2018 and started introducing advertising to Prime Video in several international markets in early 2024. The streaming service forms part of the wider Prime membership, which also includes delivery and shopping benefits.
Featured image credits: ACCC
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