Australia’s consumer watchdog has initiated legal proceedings against Amazon, alleging that the company breached consumer protection laws by introducing advertisements on its Prime Video streaming service through unfair contract terms that affected more than one million subscribers.
The lawsuit, filed by the Australian Competition and Consumer Commission (ACCC), claims that Amazon relied on unfair contractual clauses between November 1, 2023, and August 18, 2025, to alter the conditions of its Prime subscription without offering customers adequate compensation or meaningful remedies. According to the regulator, the changes forced subscribers to either accept advertisements during streaming or pay an additional monthly fee to continue enjoying an ad-free experience.
ACCC Chair Gina Cass-Gottlieb said the company’s actions left consumers with limited options after they had already committed to the service. She stated that subscribers who wanted to continue watching content without advertisements were compelled to spend more money to receive the same level of service they had originally purchased.
Responding to the allegations, an Amazon spokesperson said the company is carefully reviewing the legal case filed by the ACCC. The spokesperson added that Amazon had cooperated with the regulator throughout its investigation and remains committed to delivering the best possible experience to customers in Australia.
Prime Video had operated as an advertisement-free streaming platform for more than a decade and was included as part of Amazon’s Prime membership, which combines video streaming with benefits such as faster deliveries and other services. Amazon introduced Prime in Australia in 2018, and the company began rolling out advertisements on Prime Video globally in early 2024.
When the advertising-supported model was introduced in Australia, subscribers were informed they could continue enjoying an ad-free viewing experience only by paying an extra monthly charge. This increased the total monthly subscription cost to 12.99 Australian dollars. The ACCC noted that at the time of the change, more than 850,000 Australian customers had already prepaid for an annual Prime membership.
The regulator argued that these customers received a reduced version of the service for the remainder of their prepaid subscription unless they agreed to pay the additional fee. According to the ACCC, Amazon’s contracts contained five terms that enabled the company to make significant changes to its services and subscription conditions without giving customers the right to refunds or other effective forms of compensation.
The commission contends that these provisions allowed Amazon to unilaterally modify important aspects of its services, including Prime Video, even when the changes were materially disadvantageous to subscribers. It argues that such contract terms violate Australian consumer protection laws designed to prevent businesses from imposing unfair conditions on customers.
The case adds to growing regulatory scrutiny of Amazon’s business practices across several countries. In the United States, the Federal Trade Commission (FTC) has previously accused the company of enrolling customers into Prime memberships without clear consent and making it unnecessarily difficult to cancel subscriptions. Amazon has also recently agreed to pay a financial penalty to settle FTC allegations that victims of online shopping fraud faced an excessively complicated process while seeking assistance.
In the United Kingdom, Amazon has also faced government investigations over its online marketplace practices, including concerns regarding how products are listed and the spread of fake customer reviews. The latest legal action in Australia further intensifies international regulatory pressure on the technology giant over its treatment of consumers and subscription practices.
