Australia sues Amazon over Prime Video ads and unfair terms

The Australian Competition and Consumer Commission has taken Amazon to the Federal Court, alleging the company used unfair contract terms to push ads into Prime Video and then charged subscribers more to avoid them. The regulator says more than 1 million annual Prime customers were caught by the change, even though many had already paid $79 upfront for the service.

The ACCC alleges Amazon Commercial Services Pty Ltd included five allegedly unfair terms in Prime subscription contracts between November 2023 and August 2025. The terms let Amazon make negative changes during the contract period without giving subscribers a remedy. The commission says Amazon later relied on one or more of those terms when it introduced advertising to Prime Video in Australia in July 2024, at a time when the streaming service had been almost entirely ad-free.

After the ad rollout, annual subscribers who wanted to keep watching without commercials had to pay an extra $2.99 a month. Gina Cass-Gottlieb said consumers who wanted to avoid ads were left with no choice but to pay more to maintain the service they had originally signed up for. The ACCC began investigating after receiving consumer reports about the Prime Video changes.

The case also widens beyond Amazon’s Australian subsidiary. The ACCC alleges Amazon.com Services LLC was knowingly concerned in the conduct. The US parent helped draft the Australian contracts, made the global decision to introduce advertising to Prime Video and helped implement the change in Australia. The commission is seeking declarations, penalties, consumer redress, costs and other orders.

The filing lands under Australia’s new penalty regime for unfair contract terms, which applies to contracts made or renewed from 9 November 2023. This is one of the first contested matters brought under that framework. Unfair contract terms in consumer and small business contracts are a 2026-27 enforcement priority, with a focus on harmful cancellation terms.

Amazon is also facing a separate Federal Court case from the ACCC over alleged missing button-battery warnings on children’s backpacks sold through Amazon AU’s marketplace. That action was filed in May.