Amazon is under scrutiny in Australia following allegations made by the Australian Competition and Consumer Commission (ACCC). The regulatory body has initiated legal proceedings, claiming that the company has improperly introduced advertisements to its Prime Video service and subsequently charged subscribers extra fees for ad-free viewing. This action has raised concerns regarding the validity of terms in the Prime subscription contracts.

The ACCC’s legal action has been filed in the Federal Court, targeting Amazon Australia directly. The commission contends that the changes implemented by Amazon amounted to unfair contract terms that disadvantaged customers. Specifically, it is estimated that over one million annual Prime subscribers may have been affected by these alterations between November 2023 and August 2025.

At the core of the case is Amazon’s decision to introduce advertisements on Prime Video starting in 2024. The ACCC alleges that subscribers who had already paid for their annual memberships were unexpectedly faced with an ad-supported version of the streaming service, compelling them to pay an extra fee if they wished to continue enjoying an ad-free experience.

Details of the Allegations Against Amazon

According to the ACCC, following the implementation of ads in July 2024, subscribers who preferred to watch content without interruptions were required to pay an additional A$2.99 each month, on top of the A$79 annually they had already paid. At that time, more than 850,000 Australian subscribers had prepaid for the service, effectively receiving a lesser version of the product unless they accepted the new fee.

The ACCC Chair, Gina Cass-Gottlieb, highlighted that the organisation has a robust case. In her statement, she mentioned that Amazon allegedly included multiple unfair clauses in its contracts with Australian subscribers. These clauses purportedly enabled Amazon to alter essential elements of its Prime services without offering adequate compensation or refunds to customers.

The investigation commenced after the ACCC received numerous complaints from consumers regarding the changes to Prime Video. The regulator’s findings suggest that the unfair contract terms were signed by over one million subscribers during the specified timeframe of November 1, 2023, to August 18, 2025. Additionally, the ACCC asserts that Amazon.com Services LLC played a role in drafting the subscription contracts utilized in Australia and purportedly acted in complicity with the overall actions taken.

Amazon’s Response and Potential Consequences

In light of the legal proceedings, an Amazon Australia representative stated that the company is currently examining the ACCC’s case comprehensively. The spokesperson assured that Amazon has cooperated with the investigation from the outset and will respond as necessary.

The situation has broader implications, as Prime Video has been marketed as an ad-free streaming service for more than ten years, forming a critical aspect of Amazon’s Prime membership. The Prime service itself, which encompasses shopping benefits, expedited deliveries, and entertainment options, was introduced in Australia in 2018. With the launch of advertisements globally in early 2024, the company faces criticism from existing subscribers who are unhappy with the shift.

The ACCC is pursuing various forms of remedial action in court, including financial penalties and consumer redress. The outcome of this case may significantly impact Amazon’s operational practices in the Australian market and set a precedent for future regulatory scrutiny concerning subscription services.

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