Retail juggernaut Amazon accused of charging customers for ads on Prime Video
Australia’s consumer watchdog is launching legal action against Amazon after clauses in its contract with Aussie customers allegedly allowed it to make negative changes, including charging for ads on its streaming platform.
The Australian Competition and Consumer Commission (ACCC) alleges that these clauses meant customers were not entitled to any compensation for changes that adversely affected them, including when users were forced to pay more money to have ad-free streaming.
The company allegedly included the unfair clauses, and gave customers no options of refund or compensation. AP
The ACCC alleges customers were given little choice but to accept the changes given the “unfair” clauses included within contracts, with the watchdog claiming five contract terms allowed Amazon to “unilaterally make negative changes during the contract period without offering subscribers a remedy.”
The clauses were written into contracts with more than one million Australian subscribers between November 2023 and August 2025, with ads introduced to Prime Video during this time.
From July 2024, customers who wanted to remove ads from Prime Video were forced to pay an extra $2.99 a month, on top of the $79 they paid up front to subscribe.
“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,” ACCC Chair Gina Cass-Gottlieb said.
ACCC Chair Gina Cass-Gottlieb said customers were left with little choice but to pay the extra fees to remove ads. Peter Rae
The ACCC said it was first made aware of the alleged breaches of consumer law in late 2024, when customers complained they were now being charged for ads with little recourse to be compensated.
In documents submitted to the Federal Court, the ACCC said customers had “no contractual entitlement” to a refund or other redress if they chose to cancel their subscription.
They claimed 850,000 customers in Australia were given a “degraded service” after the changes to Prime Video were made.
“They were deprived of the service offered and paid for at the time of contracting,” the ACCC claimed.
It is also alleged Amazon’s US branch was also aware of the clauses in the contracts, and that they were involved in drafting the contracts that Australian customers signed.
“The ACCC also alleges that Amazon US made the decision to introduce advertising to Prime Video globally and helped implement the decision in Australia,” the statement from the ACCC said.
Amazon could now face fines if found guilty of the claims, or could be forced to pay compensation to customers who were adversely impacted by the clauses in the contracts.
In a statement to nine.com.au, Amazon confirmed they were reviewing the case.
“We have cooperated with the ACCC throughout its investigation and remain focused on providing the best experience for our Australian customers,” an Amazon Australia spokesperson said.
It is the second time the world’s largest company has faced legal action from the consumer watchdog.
Last month, the retailer was taken to court over accusations it failed to comply with mandatory warning standards over a children’s backpack available on its marketplace to Australian customers.
It related to button batteries, which can lead to serious injury or death if swallowed, and also pose a choking hazard to young children.
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