Australia's consumer watchdog has launched a legal action against Amazon for violating its contract by charging that it is unfair to introduce advertisements on Prime Video and force subscribers to pay extra for the ad-free streaming experience they had been promised.
The Australian Competition and Consumer Commission (ACCC) announced on Tuesday that it has filed proceedings against Amazon, alleging that more than one million annual Prime subscribers in Australia were affected by contract terms in which it was allowed to alter large changes to its streaming service without making an offer to customers.
According to ACCC, Amazon's annual Prime subscription agreements between November 2023 and August 2025 had five unfair contract terms. The regulator claimed these clauses allowed Amazon to act unilaterally during the subscription period and in July 2024, it introduced advertisements on Prime Video.
Until the change, Prime Video had been ad-free for paid subscribers.
The watchdog says customers paid 79 Australian dollars for an annual Prime membership and had been promised continuous ad-free streaming. But once advertisements were introduced, subscribers who wanted to continue watching without ads had to pay an additional monthly fee.
"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 said.
And Amazon changed the terms of an existing paid service without providing customers with an appropriate remedy or the option to cancel without disadvantage, the regulator says.
Amazon has acknowledged the legal action and said it is reviewing the ACCC’s case.
"We have collaborated with the ACCC in the course of its investigation and continue to deliver the best service to our Australian customers," the company said.
Prime Video had been ad-free for more than a decade for Amazon Prime subscribers. The service is bundled with Amazon’s wider Prime membership and also includes shopping and delivery benefits. Prime Video was launched in India in 2016 before Amazon began to show ads in several markets in early 2024.
In Australia, subscribers were informed that the ad-free viewing experience would need to be paid off in a monthly payment and the cost of the streaming service will increase to 12.99 Australian dollars per month.
The ACCC’s lawsuit could have wider implications for how digital subscription platforms modify service terms after customers have already paid. If the court rules in the regulator’s favour, the case may influence future consumer protection standards for streaming services and subscription-based digital platforms in Australia.
