Australia takes Amazon to court over allegedly unfair contracts with Prime subscribers

On Tuesday, Australia’s consumer watchdog filed a lawsuit against Amazon, alleging that the tech giant used unfair contract terms that allowed the company to add advertising to its video platform.

According to the Australian Competition and Consumer Commission (ACCC), a prominent e-commerce platform violated consumer law by imposing disproportionate means on over a million annual subscribers between November 2023 and August 2025.

Prime Video was an advertising-free streaming offering for more than a decade but an ad-free experience is now sold as an upgrade on top of Amazon’s core shipping service.

Earlier, Amazon had announced that it would include ads within Prime Video, notifying subscribers in Australia they would need to pay an additional fee each month in order to keep the service free of ads, escalating the subscription cost up to 12.99 Australian dollars.

In this connection, ACCC chair Gina Cass-Gottlieb said: “Consumers who wanted to avoid ads had no choice but to pay more to maintain the service they’d initially signed for.”

“ We have cooperated with the ACCC throughout its investigation and remain focused in providing the best experience for our Australian consumers, she further continued.”

The ACC clarified that Amazon did this by enforcing unfair clauses signed by more than a million customers between 1 November 2023 and 18 August 2025.

The Federal Trade Commission (FTC) has initiated judicial proceedings against Amazon, claiming that the company would enroll individuals in Amazon Prime without their authorization and make it intentionally challenging to cancel the subscription.

Additionally, the company committed to pay an FTC fine to resolve claims that it created a “Kafkaesque ordeal” for consumers attempting to end their subscriptions or report fraud.