Amazon sued for introducing ads in Prime Video, for charging extra for ad-free streaming

Amazon is facing legal trouble in Australia after introducing ads to Prime Video and asking subscribers to pay extra for an ad-free experience.

In Short

• Amazon is accused of using unfair Prime subscription contract terms
• Prime members had to pay extra to remove ads from Prime Video
• ACCC is seeking penalties, consumer compensation and other court orders

Amazon is facing legal action in Australia after the country's competition watchdog accused the company of unfairly introducing advertisements to Prime Video and then charging subscribers extra to continue watching without ads.

The Australian Competition and Consumer Commission (ACCC) has filed legal proceedings against Amazon Australia in the Federal Court, alleging the streaming giant for unfair terms in the company's Prime subscription contracts that allowed it to make significant changes to the streaming service without compensating customers. According to the regulator, more than one million annual Prime subscribers were affected between November 2023 and August 2025.

The case centres on Amazon's decision to introduce advertisements on Prime Video in 2024. The ACCC said customers who had already paid upfront for an annual Prime membership suddenly found themselves receiving an ad-supported version of the streaming service. Those who wanted to continue watching without advertisements were required to pay an additional fee.

"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.

According to the regulator, after July 2024, subscribers who wanted to continue with ad-free streaming had to pay an additional A$2.99 per month, despite already paying A$79 upfront for an annual Prime membership. At the time the advertisements were introduced, more than 850,000 Australian subscribers had already prepaid for a year's subscription.

The ACCC argues that these customers effectively received a downgraded version of the service for the remainder of their prepaid membership unless they agreed to pay the extra monthly fee. When announcing the change, Amazon told customers that paying the additional charge would keep Prime Video free of advertisements.

Notably, the lawsuit is not just about ads appearing on Prime Video. The ACCC alleges that Amazon relied on five unfair contract terms that allowed it to make major changes to Prime services, including Prime Video, without offering subscribers refunds or meaningful compensation.

According to the Australian watchdog, these terms were included in contracts signed by more than one million customers between 1 November 2023 and 18 August 2025. The regulator 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 introduction of advertisements on Prime Video in 2024.

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 offered as an ad-free streaming service for more than a decade as part of Amazon's wider Prime membership, which bundles shopping benefits, faster deliveries and entertainment services. Prime launched in Australia in 2018, while Amazon began rolling out advertisements on Prime Video across several markets globally in early 2024.

- Ends