Australia’s competition watchdog has sued Amazon.com Inc. (NASDAQ:AMZN), alleging the e-commerce giant used unfair subscription terms to force more than one million annual Prime members to either watch advertisements on Prime Video or pay extra to remove them.
Australia Alleges Amazon Used Unfair Prime Subscription Terms
On Tuesday, the Australian Competition and Consumer Commission announced that it has launched legal proceedings against Amazon’s Australian business.
It alleged that the company relied on unfair contract terms between November 2023 and August 2025 to change the conditions of its Prime Video service.
According to the regulator, Amazon introduced advertisements on Prime Video in July 2024 and required annual Prime subscribers to either accept the ads or pay an additional AU$2.99 (about $2.05) per month for an ad-free experience.
The ACCC alleges customers who chose to cancel their annual Prime memberships because of the change were not entitled to refunds for the unused portion of their subscriptions.
ACCC Says Consumers Were Left With No Fair Choice
“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,” ACCC Chair Gina Cass-Gottlieb said in a statement.
The regulator said it began investigating Amazon after receiving complaints from consumers following the rollout of ads on Prime Video in July 2024.
The ACCC is seeking penalties, consumer redress, legal costs, declarations that the contract terms were unfair and additional court orders.
Amazon Responds To The Lawsuit
In an emailed statement to Benzinga, an Amazon spokesperson said, “We are reviewing the case filed by the ACCC in detail. We have cooperated with the ACCC throughout its investigation and remain focused on providing the best experience for our Australian customers.”
Price Action: Amazon shares closed 3.2% higher at $240.14 on Monday and edged up another 0.1% to $240.37 in premarket trading Tuesday, according to Benzinga Pro.
According to Benzinga Edge Rankings, Amazon scores in the 95th percentile for Growth, though its stock has posted negative short- and medium-term returns while remaining positive over the long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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