ACCC Sues Amazon Over Allegedly Unfair Contract Terms For Prime Video Users

(RTTNews) - Australia's competition regulator announced that it has filed a case against tech major Amazon's Australian unit over alleged unfair terms in its Prime subscription contracts, which allowed the firm to introduce advertising to its streaming service, Amazon Prime Video.

The Australian Competition and Consumer Commission or ACCC is seeking declarations, penalties, consumer redress, costs and other orders.

In a statement, the ACCC said that it has commenced Federal Court proceedings against Amazon Commercial Services Pty Ltd or Amazon AU for allegedly breaching the Australian Consumer Law.

Amazon AU allegedly used five unfair contract terms in Prime contracts with more than one million annual subscribers between November 2023 and August 2025. These terms allowed the firm to unilaterally make negative changes during the contract period without offering subscribers a remedy.

The regulator also alleged that the Australian unit later relied on one or more of these unfair terms when it introduced ads to Prime Video in Australia in July 2024. Prior to that, Amazon Prime Video was almost entirely ad-free.

And, after July 2024, subscribers who wanted to maintain ad-free streaming had to pay an additional $2.99 per month, even though annual subscribers already having paid $79 upfront for the service.

ACCC Chair Gina Cass-Gottlieb said, "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. 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."

The ACCC also alleges that Amazon US unit Amazon.com Services LLC was knowingly concerned in Amazon AU's conduct. Amazon US allegedly was involved in drafting the Australian contracts that contained the unfair terms, according to the ACCC.

In addition, the US unit allegedly made the decision to introduce advertising to Prime Video globally and helped implement the decision in Australia.

The ACCC's investigation on Amazon AU's contracts was initiated after receiving consumer reports about the introduction of ads to Prime Video in 2024.

In the overnight trading, Amazon shares were gaining around 0.29%, trading at $240.84, extending the 3.2% gain on Monday's regular trading closing.