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Competition watchdog the ACCC has taken Amazon to court over alleged unfair contract terms to introduce advertising to Prime Video for Australian subscribers.
The regulator alleges Amazon AU included five unfair terms in annual Prime subscription contracts used between November 2023 and August 2025.
More than one million annual subscribers were covered by the contracts.
The ACCC alleges Amazon later relied on one or more of those terms when it introduced advertising to Prime Video in Australia in July 2024.
Subscribers wanting to keep the service ad-free were required to pay an extra $2.99 a month, despite having already paid $79 upfront for an annual Prime subscription.
ACCC chair Gina Cass-Gottlieb said the company had relied on unfair contract terms to change the service.
"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," Cass-Gottlieb said.
"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 also alleges Amazon.com Services LLC was knowingly concerned in the conduct. It claims the US company helped draft the Australian contracts and made the decision to introduce advertising to Prime Video globally before helping implement the change in Australia.
Cass-Gottlieb said businesses offering subscription services should review their contracts.
"All businesses are required to balance rights and obligations in their standard form contracts with consumers to ensure they are fair," Cass-Gottlieb said.
"Contraventions of unfair contract term protections are subject to significant penalties. We strongly encourage all businesses, particularly those offering subscriptions, to review their contracts to ensure they comply with the Australian Consumer Law."
The ACCC is seeking declarations, penalties, consumer redress, costs and other orders.
An Amazon spokesperson said the company is reviewing the case in detail.
"We have cooperated with the ACCC throughout its investigation and remain focused on providing the best experience for our Australian customers," the spokesperson said.
The regulator said the case is one of its first contested matters under the penalty regime for unfair contract terms, which applies to contracts made or renewed from November 9, 2023.
It began investigating Amazon's contracts after receiving consumer complaints about the introduction of advertising to Prime Video in 2024.
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