ACCC Sues Amazon Over Prime Video Ads That Made Subscribers Pay More

Amazon Australia is facing Federal Court action after the ACCC alleged it used unfair Prime subscription terms to introduce ads on Prime Video, forcing annual subscribers to pay extra if they wanted to keep streaming without interruptions.
 

TL;DR

• The ACCC is suing Amazon AU over allegedly unfair Prime contract terms.
• The watchdog says more than one million annual subscribers were affected.
• Prime Video ads arrived in Australia in July 2024.
• Subscribers had to pay an extra $2.99 per month to stay ad-free.
• Amazon says it is reviewing the case.

Why The ACCC Is Taking Amazon To Court Over Prime Video Ads

The Australian Competition and Consumer Commission has commenced Federal Court proceedings against Amazon Commercial Services Pty Ltd, also known as Amazon AU, alleging the company breached the Australian Consumer Law through unfair contract terms in its Prime subscription agreements.

At the center of the case is Amazon Prime Video’s move from an almost entirely ad-free streaming experience to one that included advertisements from July 2024. According to the ACCC, annual Prime subscribers who had already paid $79 upfront were then required to pay an additional $2.99 per month if they wanted to keep watching without ads.

The regulator alleges Amazon AU’s Prime contracts with more than one million Australian annual subscribers contained five unfair contract terms between November 2023 and August 2025. These terms allegedly allowed Amazon to make negative changes to the service during the contract period without offering subscribers a pro rata refund or other meaningful redress.

“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,” ACCC Chair Gina Cass-Gottlieb said.

“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.”
 

How Prime Video’s Ad-Free Shift Created A Consumer Law Flashpoint

Prime is one of Australia’s most popular streaming services and includes access to Prime Video, along with shopping and delivery benefits.

Prime Video has carried popular shows such as Euphoria and Yellowstone, making the ad change a significant shift for subscribers who expected the previous streaming experience.

The ACCC’s position is that Amazon AU had too much power under its standard form contracts. The watchdog says the challenged terms created a significant imbalance because Amazon could change key characteristics of the service while consumers had limited ability to negotiate, refuse, or receive meaningful compensation.

Under Australian Consumer Law, contract terms may be considered unfair if they cause a significant imbalance, are not reasonably necessary to protect legitimate business interests, and would cause financial or other harm if enforced. The law also identifies terms that allow one party to unilaterally vary contract terms or service characteristics as examples that may be unfair.
 

Amazon US Is Also Named In The ACCC’s Prime Video Case

The ACCC also alleges Amazon.com Services LLC, or Amazon US, was knowingly concerned in Amazon AU’s conduct.

The watchdog claims Amazon US was involved in drafting the Australian contracts and made the global decision to introduce advertising to Prime Video, including helping implement the change in Australia.

Both Amazon AU and Amazon US are owned by Amazon.com, Inc. Amazon launched Prime subscriptions in Australia in June 2018, offering monthly subscriptions for $9.99 or annual subscriptions for $79 upfront through a standardized online sign-up process.

Amazon has said it is reviewing the case.
 

What The Amazon Prime Lawsuit Could Mean For Subscription Businesses

The ACCC is seeking declarations, penalties, consumer redress, costs, and other orders. The case is also notable because it is one of the first contested matters brought by the ACCC under the new penalty regime for unfair contract terms, which applies to contracts made or renewed from November 9, 2023.

“All businesses are required to balance rights and obligations in their standard form contracts with consumers to ensure they are fair,” Ms. Cass-Gottlieb said.

“Contraventions of unfair contract term protections are subject to significant penalties. We strongly encourage all businesses, particularly those offering subscriptions, to review their contracts to ensure they comply with the Australian Consumer Law.”

The ACCC said unfair contract terms in consumer and small business contracts, with a focus on harmful cancellation terms, are a compliance and enforcement priority in 2026-27.

That makes the Amazon case bigger than one streaming service. It could become an important test for how subscription platforms structure pricing, service changes, refunds, and consumer remedies when paid digital products evolve after customers have already signed up.