- ACCC sues Amazon over Prime Video ad introduction.
- Existing subscribers charged extra for ad-free streaming.
- Regulator alleges unfair contract terms affected many customers.
- ACCC seeks penalties, redress for consumer compensation.
Australia’s competition regulator has taken Amazon to court, alleging the company introduced advertisements on Prime Video and then charged existing subscribers extra to keep watching without them. The Australian Competition and Consumer Commission (ACCC) filed proceedings in the Federal Court, claiming Amazon used unfair contract terms to make major changes to its Prime service without offering customers any refund or meaningful compensation.
The regulator says more than one million annual Prime subscribers were affected between November 2023 and August 2025.
Did Amazon Downgrade Prime Video for Paying Subscribers?
According to the ACCC, Amazon introduced advertisements on Prime Video in 2024, catching many subscribers off guard. Customers who had already paid upfront for an annual Prime membership suddenly found themselves watching an ad-supported version of the service they had originally signed up for. Those who wanted to continue watching without ads were asked to pay more.
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The ACCC said that after July 2024, subscribers who wanted an ad-free experience had to pay an additional A$2.99 per month, even though they had already paid A$79 upfront for a full year of Prime membership. At the time the advertisements were introduced, more than 850,000 Australian subscribers had already prepaid for an annual subscription.
“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,” ACCC Chair Gina Cass-Gottlieb said in a statement, as reported by Reuters.
What Are the ACCC’s Allegations Against Amazon?
The regulator’s case goes beyond just the introduction of ads. The ACCC alleges Amazon relied on five unfair contract terms that allowed it to make significant changes to Prime services, including Prime Video, without giving subscribers refunds or adequate compensation. These terms were part of contracts signed by more than one million customers between 1 November 2023 and 18 August 2025.
The watchdog also alleges that Amazon.com Services LLC was involved in drafting the Australian subscription contracts and knowingly participated in the conduct. The ACCC launched its investigation after receiving consumer complaints about the ad rollout.
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The regulator is seeking court declarations, financial penalties, consumer redress, legal costs, and other orders against Amazon.
In response, an Amazon Australia spokesperson told Reuters that the company is “reviewing the case filed by the ACCC in detail” and had cooperated with the regulator throughout the investigation.
Prime Video had been available as an ad-free service for over a decade as part of Amazon’s broader Prime membership, which also includes shopping perks and faster delivery. Prime launched in Australia in 2018, while Amazon began rolling out advertisements across several global markets in early 2024.
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