Canberra: The Australian Competition and Consumer Commission (ACCC) has initiated legal action against Amazon, alleging that the e-commerce and streaming giant utilized unfair contract terms to introduce advertisements on Prime Video and forced existing annual subscribers to pay extra to maintain an ad-free viewing experience. The consumer watchdog announced on Tuesday that it had officially filed a lawsuit in the Federal Court, targeting the contractual terms included in Amazon Australia’s annual Prime subscription agreements between November 2023 and August 2025.
According to the regulator, the disputed contract terms gave the company unilateral power to make significant changes to the Prime Video service for more than one million Australian subscribers without offering any form of financial compensation or recourse. ACCC Chair Gina Cass-Gottlieb alleged that Amazon explicitly relied on these unfair clauses when it introduced advertisements to the platform in July 2024. Following that rollout, subscribers who wished to continue watching content without commercial interruptions were forced to pay an additional fee of A$2.99 per month, despite having already paid an upfront annual membership fee of A$79 (US$54). The regulator contends that including and enforcing multiple unfair terms in these consumer contracts directly violated Australian consumer protection laws.
The ACCC launched its comprehensive investigation into Amazon Australia’s subscription contracts after receiving a wave of formal complaints from consumers following the introduction of advertisements in 2024. This legal challenge in Australia follows severe regulatory scrutiny for the company globally. In 2025, Amazon agreed to pay a massive US$2.5 billion in penalties and consumer refunds in the United States, alongside implementing changes to its cancellation processes, to settle a prominent consumer protection lawsuit filed by the US Federal Trade Commission (FTC).
Currently, advertisements on Prime Video have become a standard feature across major global markets, including Australia, Austria, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, the Netherlands, New Zealand, Spain, Sweden, the United Kingdom, and the United States. Across all of these international territories, the company has implemented a tiered system where subscribers must opt for an additional monthly premium if they want to bypass commercials.
