Australian Regulator Challenges Amazon's Prime Video Ad Introduction
The Australian Competition and Consumer Commission (ACCC) has initiated legal action against Amazon Australia, alleging the company unfairly introduced advertisements on its Prime Video service for annual subscribers who had already paid upfront for their memberships. The lawsuit, filed in the Federal Court, centers on claims that Amazon relied on unfair terms within its Prime subscription contracts to make significant changes to the streaming service without adequately compensating customers.
The ACCC's allegations state that Amazon's decision to shift prepaid annual Prime subscribers to an ad-supported version of Prime Video constituted a downgrade of service. Those wishing to continue watching without advertisements were subsequently required to pay an additional A$2.99 per month.
Over 850,000 Prepaid Subscribers Affected
According to the regulator, more than 850,000 customers had prepaid for their annual Prime memberships when the advertising changes were implemented. The ACCC states that over one million annual Prime subscribers were impacted between November 1, 2023, and August 18, 2025, receiving a service different from what they initially paid for, unless they opted for the extra monthly charge.
An annual Prime membership in Australia costs A$79. The lawsuit seeks various court orders, including declarations, financial penalties, consumer redress, and legal costs.
Allegations of Unfair Contract Terms
ACCC Chair Gina Cass-Gottlieb stated, "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." The ACCC specifically claims Amazon relied on five unfair contract terms that allowed it to make major alterations to Prime services, including Prime Video, without offering refunds or meaningful compensation to affected subscribers.
Furthermore, the ACCC alleges that Amazon.com Services LLC was involved in drafting the Australian subscription contracts and knowingly participated in the conduct under investigation. The watchdog launched its probe following numerous consumer complaints regarding the introduction of advertisements.
Amazon's Response and Service History
An Amazon Australia spokesperson confirmed the company is "reviewing the case filed by the ACCC in detail" and has cooperated with the regulator throughout its investigation. Historically, Prime Video had been an ad-free service for over a decade as a core component of Amazon's broader Prime membership offering.
Amazon launched its Prime service in Australia in 2018 and began rolling out advertisements on Prime Video across several global markets, including Australia, in early 2024. The ACCC's action highlights growing scrutiny over changes to subscription services that impact existing, prepaid customers.