---
title: "Australia Sues Amazon Over Prime Video Ads, Alleging Unfair Contract Terms"
description: "Australia's competition watchdog has taken Amazon to federal court, alleging the company used unfair contract terms to insert advertising into Prime Video midway through subscriptions customers had already paid for — then charged extra to take the ads back out."
category: "Business"
category_url: https://herald.la/category/business
author: "Valeria Ortiz"
published: 2026-06-30T02:48:00.000Z
updated: 2026-06-30T02:48:00.000Z
canonical: https://herald.la/article/australia-sues-amazon-over-prime-video-ads-alleging-unfair-contract-terms
tags: ["Amazon", "ACCC", "Australia", "Prime Video", "consumer protection", "tech regulation"]
---
# Australia Sues Amazon Over Prime Video Ads, Alleging Unfair Contract Terms

Australia's competition watchdog has taken Amazon to federal court, alleging the company used unfair contract terms to insert advertising into Prime Video midway through subscriptions customers had already paid for — then charged extra to take the ads back out.

A streaming change Australians didn't ask for has landed Amazon in court.

## The lawsuit

The [Australian Competition and Consumer Commission](https://www.accc.gov.au/media-release/amazon-in-court-for-introducing-ads-to-prime-video-using-allegedly-unfair-contract-terms) filed proceedings in Federal Court on June 29, alleging that Amazon relied on unfair clauses in its standard subscription contracts to degrade a service customers had already bought. At the center of the case is Amazon's mid-2024 decision to start showing ads on Prime Video — bundled with Prime membership — for subscribers who had paid for annual plans up front. Those who wanted the ad-free experience they originally signed up for were told they had to pay an extra fee each month. The ACCC says Amazon notified annual subscribers of the change but offered no refund or other meaningful remedy for the rest of their prepaid term.

## What the regulator alleges

The watchdog points to five terms it says were unfair under Australian Consumer Law, contending they let Amazon unilaterally worsen its service or change conditions mid-subscription without compensating customers. The ACCC says Amazon's U.S. parent was "knowingly involved," exposing it to joint liability. Chair Gina Cass-Gottlieb said subscribers "were left with no choice but to pay more to maintain the service they'd initially signed up for." The regulator is seeking declarations, penalties, consumer redress and costs; it is among the first contested cases under a toughened penalty regime in which fines can reach the greater of A$50 million, three times the benefit gained, or 30 percent of relevant turnover. Roughly 850,000 annual subscribers were shifted into ad-supported viewing for their remaining prepaid period, the ACCC says.

## Amazon's response

An Amazon spokesperson said the company is "reviewing the case filed by the ACCC in detail," adding that it had "cooperated with the ACCC throughout its investigation" and remains "focused on providing the best experience for our Australian customers." Amazon has admitted no wrongdoing, and the allegations are unproven; the company is entitled to contest them.

## A global pattern

The Australian action fits a widening pattern of scrutiny of Amazon's subscription practices. In the United States, Amazon agreed in 2025 to a [$2.5 billion settlement](https://natlawreview.com/article/ftcs-landmark-25-billion-amazon-settlement-highlights-ongoing-focus-dark-patterns) with the Federal Trade Commission over allegations it used manipulative "dark pattern" designs to enroll customers in Prime and made cancellation deliberately hard — a deal that included $1 billion in penalties and $1.5 billion in refunds. The European Union secured commitments from Amazon in 2022 to simplify Prime cancellation. The ACCC has named unfair contract terms an enforcement priority, signaling the Amazon case may not be its last.

## Sources

- [Amazon in court for introducing ads to Prime Video using allegedly unfair contract terms](https://www.accc.gov.au/media-release/amazon-in-court-for-introducing-ads-to-prime-video-using-allegedly-unfair-contract-terms)
- [ACCC sues Amazon over Prime ads, 'unfair' contracts](https://ia.acs.org.au/article/2026/accc-sues-amazon-over-prime-ads-unfair-contracts.html)
- [FTC's landmark $2.5 billion Amazon settlement highlights focus on dark patterns](https://natlawreview.com/article/ftcs-landmark-25-billion-amazon-settlement-highlights-ongoing-focus-dark-patterns)