Australia's competition regulator has initiated legal proceedings against Amazon's Australian subsidiary, alleging that the company breached consumer protection laws by introducing advertisements on its Prime Video streaming service after customers had already paid for annual Prime memberships.
The Australian Competition and Consumer Commission (ACCC) claims that more than one million Australian consumers who subscribed to Amazon Prime for A$79 per year were affected when advertisements were introduced on Prime Video. According to the regulator, customers were later required to pay an additional A$2.99 per month to continue watching content without advertisements.
The ACCC argues that Amazon altered a key feature of the subscription after consumers had already entered into annual contracts. It has also questioned whether contractual terms allowing such changes may be unfair under Australian consumer law.
The regulator is seeking financial penalties, declarations from the Federal Court, compensation or other remedies for affected consumers, and court orders preventing similar practices in the future.
Amazon Australia has acknowledged the legal proceedings and stated that it is reviewing the case. The company said it had cooperated with the ACCC during the investigation and will present its response through the court process.
Amazon Prime is a bundled subscription service offering Prime Video, faster delivery on eligible purchases, Prime Gaming and other digital services. In recent years, several streaming platforms worldwide have introduced advertising-supported subscription models while offering ad-free viewing at an additional cost.
Consumer rights groups have argued that companies should not substantially alter services already purchased under long-term subscriptions without providing adequate notice or obtaining meaningful consumer consent.
Legal experts believe the case could become an important test of how far digital platforms can modify subscription benefits after customers have signed annual contracts. A ruling in favour of the ACCC could strengthen consumer protections, encourage greater transparency and influence regulation of digital subscription services in other countries.
The Federal Court's decision is expected to be closely watched by consumer advocates, technology companies and streaming platforms worldwide, as it may establish an important precedent for digital subscription contracts.