ACCC Sues Amazon over Prime Video Ads: 1 Million Aussies Forced to Pay Extra for Ad-Free Streaming

The ACCC has launched Federal Court proceedings against Amazon, alleging the tech giant used unfair contract terms to introduce ads to Prime Video in Australia, forcing more than 1 million annual subscribers to pay an extra $2.99 per month to keep the ad-free service they had already paid for upfront.

Amazon is facing a Federal Court showdown with Australia's consumer watchdog over the introduction of ads to Prime Video.

The Australian Competition and Consumer Commission has commenced proceedings against Amazon Commercial Services Pty Ltd, alleging the company breached Australian Consumer Law by including unfair contract terms in its Prime subscription contracts, and later relying on those terms to introduce advertising to Amazon Prime Video.

Between November 2023 and August 2025, more than 1 million annual Prime subscribers in Australia entered into contracts that the ACCC alleges contained five unfair terms allowing Amazon to "unilaterally make negative changes during the contract period without offering subscribers a remedy."

In July 2024, Amazon introduced ads to Prime Video for the first time. Subscribers who wanted to maintain the ad-free experience they had signed up for were forced to pay an additional $2.99 per month. This was despite annual subscribers already having paid $79 upfront for their 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," said ACCC Chair Gina Cass-Gottlieb. "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 estimates 850,000 annual subscribers were "deprived of the service they were initially offered and signed up for" after the ads were introduced. Those customers could be eligible for compensation if the allegations are proven.

The regulator is also alleging Amazon's US parent company, Amazon.com Services LLC, was "knowingly concerned" in the Australian unit's conduct, involved in drafting the Australian contracts, and made the decision to introduce advertising to Prime Video globally .

The case is one of the first contested matters taken by the ACCC under the new penalty regime for unfair contract terms, which applies to contracts made or renewed from 9 November 2023. Penalties can reach the greater of $50 million, three times the value derived from the breach, or 30% of the company's turnover during the breach period.

"All businesses are required to balance rights and obligations in their standard form contracts with consumers to ensure they are fair," Cass-Gottlieb said.

The ACCC is seeking declarations, penalties, consumer redress, costs and other orders. The watchdog began investigating Amazon after receiving consumer reports about the introduction of ads to Prime Video in 2024.

A spokesperson for Amazon Australia said the company is "reviewing the case filed by the ACCC in detail" and "have cooperated with the ACCC throughout its investigation and remain focused on providing the best experience for our Australian customers" .

Here is the question this case raises. When Amazon introduced ads to Prime Video, 1 million annual subscribers had already paid $79 for a year of the service they signed up for. Then Amazon changed the deal and charged them $2.99 more if they wanted to keep it as it was. If a contract lets a company change the terms after you've paid and leave you with no remedy, is it really a contract or just a list of things they can do to you?

As the ACCC takes Amazon to court over allegedly unfair Prime Video ad changes, The Silicon Review asks a final question. When a streaming giant changes the rules after you've already paid, who is really protected the consumer or the fine print?

FAQ:

Q: What is the ACCC suing Amazon over?
A: The ACCC is suing Amazon over five allegedly unfair contract terms in its Prime subscription contracts that allowed the company to introduce ads to Prime Video without offering subscribers a remedy.

Q: How many Australian subscribers are affected?
A: More than 1 million annual Prime subscribers were affected, with approximately 850,000 receiving a "degraded service" after the changes.

Q: What happened to Prime Video in July 2024?
A: Amazon introduced ads to Prime Video for the first time, and subscribers who wanted to keep the ad-free experience had to pay an extra $2.99 per month.

Q: Is the ACCC also suing Amazon's US parent company?
A: Yes, the ACCC alleges Amazon.com Services LLC was "knowingly concerned" in the Australian conduct and was involved in drafting the Australian contracts.

Q: What penalties could Amazon face?
A: Penalties could include up to $50 million, three times the value derived from the breach, or 30% of the company's turnover during the breach period, plus consumer redress.