The Australian Competition and Consumer Commission (ACCC) has initiated legal proceedings against Amazon in the Federal Court, accusing the e-commerce giant of incorporating unfair contract terms that enabled it to introduce advertisements on Prime Video and compel subscribers to pay an additional fee to maintain an ad-free experience.
ACCC files lawsuit over Prime Video ad changes
The ACCC announced on Tuesday that it had filed a case in the Federal Court, alleging that Amazon Australia included unfair terms in its annual Prime subscription contracts between November 2023 and August 2025. According to the regulator, these terms allowed Amazon to modify Prime Video services for more than one million subscribers without offering any compensation.
ACCC Chair Gina Cass-Gottlieb stated that Amazon relied on some of those terms when it introduced advertisements on Prime Video in July 2024. Subscribers who wished to continue watching content without ads were required to pay an additional A$2.99 per month, despite having already paid an annual fee of A$79 (US$54).
Consumer complaints triggered investigation
“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,” Gottlieb said. The ACCC’s investigation into Amazon Australia’s subscription contracts began after it received complaints from consumers following the introduction of ads on Prime Video in 2024, according to reports by Reuters.
In 2025, Amazon agreed to pay US$2.5 billion in penalties and refunds in the United States and changed the way subscribers cancel their Prime memberships to settle a lawsuit filed by the Federal Trade Commission.
Global context of Prime Video ads
Currently, Prime Video ads are available in Australia, Austria, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, the Netherlands, New Zealand, Spain, Sweden, the United Kingdom, and the United States. In all these markets, subscribers have the option of paying an additional fee for an ad-free viewing experience.
The ACCC’s case underscores growing regulatory scrutiny over subscription service practices, particularly regarding unilateral changes to contract terms and the imposition of additional fees without subscriber consent.
