Australia’s consumer watchdog has taken Amazon to court, accusing the company of using unfair contract terms after introducing advertisements on its Prime Video streaming service. The Australian Competition and Consumer Commission (ACCC) claims Amazon violated consumer protection laws by changing the service for more than one million subscribers and forcing many customers to pay extra if they wanted to continue watching without ads.
According to the ACCC, the disputed contracts were in place between November 2023 and August 2025. The watchdog argued that customers who had signed up for an ad-free streaming experience suddenly found themselves with advertisements unless they agreed to pay an additional monthly fee.
Amazon has been sued by Australia’s consumer watchdog for introducing advertising to its Prime Video streaming service and then forcing existing subscribers to pay more to avoid the ads https://t.co/XgqU9zrx0M
— Bloomberg (@business) June 30, 2026
Explaining the regulator’s concerns, ACCC Chair Gina Cass-Gottlieb said, “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.”
Subscribers say the service changed midway
Prime Video had been offered without advertisements for years as part of Amazon’s Prime membership, which also includes shopping and delivery benefits. The service became available in Australia in 2018.
When Amazon started introducing advertisements globally in early 2024, Australian customers were informed that they would need to pay an extra monthly charge to continue watching ad-free. This increased the monthly cost of the service to 12.99 Australian dollars.
Amazon hauled to Federal Court as Australia's consumer watchdog challenges Prime Video advertisements https://t.co/Ihyb06yeEE
— Daily Mail (@DailyMail) June 29, 2026
The ACCC said that at the time of the change, more than 850,000 Australians had already paid for an annual Prime subscription. According to the regulator, these customers received a reduced version of the service for the remaining period of their subscription unless they agreed to pay more.
The watchdog also alleged that Amazon relied on five unfair contract terms that allowed it to make major changes to its services without giving subscribers any right to refunds or other meaningful compensation.
Advertisements on Prime Video
Amazon Prime Video introduced limited advertisements to its standard Prime membership tier in early 2024 as part of a strategy to increase investment in content. Announced in September 2023, the ads first rolled out in the United States, United Kingdom, Germany, and Canada around late January 2024, followed by additional markets including France, Italy, Spain, Mexico, and Australia later that year, with further expansions continuing into 2025 and 2026. The new subscription policy was implemented in India in June 2025.
Prior to this change, Prime Video content had been largely ad-free for subscribers. After introducing ads, Amazon offered an optional ad-free upgrade, allowing users to pay additionally on top of their existing Prime subscription for uninterrupted viewing of on-demand movies and shows, though live events like sports typically retained advertising.
In 2026, Amazon rebranded and enhanced this ad-free tier as Prime Video Ultra, raising the monthly cost in the US to $4.99 while adding features such as increased concurrent streams, more offline downloads, and exclusive access to 4K/UHD content in select cases. The ad-free or Ultra subscription is now available in numerous countries, including Australia, the UK, Canada, Germany, France, Italy, Japan, India, and others, though pricing and details vary by market.
In India, an additional payment of ₹699 per year or ₹129 per month on top of the existing base membership is needed to avoid ads in movies and TV shows. This policy shift, which made ads the default experience unless the extra fee is paid, has drawn regulatory scrutiny and legal challenges in various regions.
Amazon says it is reviewing the case
According to the media reports, an Amazon spokesperson said the company is carefully examining the allegations while responding to the lawsuit,
“We are reviewing the case filed by the ACCC in detail,” the spokesperson said, adding, “We have cooperated with the ACCC throughout its investigation and remain focused on providing the best experience for our Australian customers.”
Amazon has faced similar scrutiny before
This is not the first time Amazon’s subscription practices have come under government scrutiny.
In the United States, the Federal Trade Commission (FTC) has previously accused the company of enrolling customers into Prime memberships without proper consent and making cancellations unnecessarily difficult.
Amazon also recently agreed to pay a fine to settle another FTC case alleging that the company created what regulators described as a “Kafkaesque ordeal” for customers trying to resolve online shopping fraud.
In the United Kingdom, authorities have also investigated Amazon over the way products are listed on its platform and concerns about fake customer reviews.
