Australia Sues Amazon Over Prime Video Ads, Alleges Unfair Contract Terms

Amazon is facing legal proceedings in Australia after the country's competition regulator accused the technology giant of using unfair contract terms to introduce advertising on its Prime Video streaming platform.

The Australian Competition and Consumer Commission (ACCC) has initiated proceedings in the Federal Court, alleging that Amazon breached Australian consumer law by relying on subscription terms that unfairly allowed it to modify its Prime Video service, as per a report by Bloomberg (BBG).

The ACCC alleged that between November 2023 and August 2025, Amazon Australia used these contractual provisions to alter the Prime Video experience for more than one million customers holding annual Prime memberships, without offering compensation.

"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.

Subscribers Asked To Pay More

According to the ACCC, customers who had already paid the annual Prime membership fee of A$79 (around US$54) were subsequently presented with two choices after advertisements were introduced on Prime Video in 2024.

Subscribers could either continue watching content with advertisements or pay an additional A$2.99 per month to remove them.

The regulator is seeking financial penalties against Amazon, along with compensation for affected consumers. The ACCC has also alleged that Amazon's headquarters in the United States played a role in both drafting the subscription agreements used in Australia and the decision to introduce advertisements on the platform.

An Amazon Australia spokesperson said the company was "reviewing the case filed by the ACCC in detail" and noted that it had cooperated with the regulator throughout the investigation, as per Reuters.

Prime Video's Ad-Supported Model Expands Globally

Prime Video's ad-supported subscription model is now 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 each of these markets, subscribers can pay an additional fee to continue watching content without advertisements.

The ACCC reportedly launched its investigation after receiving complaints from consumers following the introduction of advertisements on Prime Video during 2024.

The legal action follows a separate regulatory settlement in the US. Amazon agreed last year to pay US$2.5 billion in penalties and refunds and revised the way customers cancel their Prime memberships to resolve a lawsuit brought by the US Federal Trade Commission.