Australia’s Consumer Watchdog Targets Amazon Over Allegedly Unfair Prime Video Contract Terms
Australia’s consumer watchdog has initiated legal action against Amazon, alleging that the e-commerce giant implemented unfair contract terms in its Prime Video service, impacting over a million annual subscribers. The Australian Competition and Consumer Commission (ACCC) contends that Amazon violated consumer protection laws by introducing these terms between November 2023 and August 2025.
ACCC chair Gina Cass-Gottlieb stated, “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.” The ACCC’s filing asserts that Amazon relied on five unfair contract terms that permitted the company to unilaterally make materially adverse changes to its services, including Prime Video, and the governing terms, without providing subscribers with a contractual right to refunds or meaningful redress.
Prime Video, which had been a commercial-free offering included with Amazon’s Prime subscription since its introduction in Australia in 2018, began rolling out advertising globally in early 2024. In Australia, Amazon informed subscribers that an additional monthly fee would be required to retain an ad-free experience, increasing the monthly cost to A$12.99. At the time of this change, over 850,000 individuals in Australia had already prepaid for a year of the Prime service. The ACCC noted that these subscribers received a degraded, ad-supported Prime Video service for the remainder of their prepaid term unless they opted for the ad-free tier.
This regulatory action highlights a growing trend of scrutiny over digital platform contract terms and consumer rights. For legal professionals, compliance officers, and corporate executives, this case underscores the critical importance of meticulously reviewing and ensuring the fairness of subscription service agreements, particularly when introducing significant changes to service offerings. Investors and business leaders in the digital services sector should monitor this case for potential implications on contract drafting and consumer engagement strategies.
Amazon’s practices have faced regulatory challenges in other jurisdictions. In the United States, the Federal Trade Commission (FTC) has previously taken legal action against Amazon concerning allegations of enrolling individuals in Prime without their consent and creating obstacles to subscription cancellation. Furthermore, Amazon recently agreed to pay an FTC fine to resolve claims related to a “Kafkaesque ordeal” for victims of online shopping fraud. In the United Kingdom, Amazon’s methods for listing products and the prevalence of fake product reviews have also been subject to government investigation.
