The Australian Competition and Consumer Commission (ACCC) is taking Amazon to court, alleging the tech giant unfairly charged more than one million Prime Video subscribers extra to watch without ads.
The consumer watchdog claims Amazon relied on “unfair contract terms” when it introduced ads to Prime Video in 2024, requiring customers to pay an additional fee to keep watching ad-free.
Amazon has said it is “reviewing the case”.
Here’s what you need to know.
Background
Amazon was founded as an online bookseller in 1994 beforeexpanding into streaming.
It launched a video streamingservice in 2006, rebranding it toPrime Video in the 2010s.
Then, in 2018, Amazon Prime arrived in Australia, offeringaccess to Prime Video, free delivery and other member benefits.
A subscription costs $9.99 per month or $79 annually.
ACCC
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On Tuesday, the ACCC announced it would take Amazon to the Federal Court, alleging its Prime subscription contracts included fiveunfair terms affecting more thanone million annual subscribers.
The watchdog alleges Amazon relied on one of those terms tointroduce ads to Prime Video in July 2024. Until then, the servicehad been almost entirely ad-free.
Subscribers who wanted to keep watching without ads were then required to pay an additional $2.99 a month.
“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 ACCC also alleges Amazon’s U.S. parent company, Amazon.com Services LLC, was “knowingly concerned” in the Australian arm’s conduct, including drafting the contracts and deciding to introduce ads globally.
The case is one of the first contested matters brought under the watchdog’s new penalty regime for unfair contract terms, which applies to contracts made or renewed from 9 November 2023.
Response
An Amazon Australia spokesperson told TDA the company was “reviewing the case filed by the ACCC in detail”.
“We have cooperated with the ACCC throughout its investigation and remain focused on providing the best experience for our Australian customers,” the spokespersonsaid.
The Federal Court is yet to announce a hearing date.
