Amazon Sued by Australian Watchdog Over Prime Video Ads

Amazon.com Inc. has been taken to court by the Australian competition regulator over its introduction of advertising on Prime Video and the subsequent fee hike for subscribers who wanted to avoid the ads.

The Australian Competition & Consumer Commission said Tuesday it filed proceedings in the Federal Court, alleging that Amazon included unfair contract terms in its Prime subscription agreements. The regulator claims those terms were later used to insert ads into Prime Video in 2024.

More than a million subscribers who had already paid an annual fee of A$79 ($54) for the service had no choice but to pay an extra A$2.99 a month to keep the service ad-free, the ACCC said.

The regulator also alleged that Amazon's U.S. headquarters was "knowingly concerned" in the Australian unit's conduct when drafting the contracts and introducing the advertising.

The ACCC is seeking penalties against Amazon and consumer redress. The amount was not specified.

The case follows a separate settlement last year in the U.S., where Amazon agreed to pay $2.5 billion in penalties and refunds and change its cancellation process to resolve a Federal Trade Commission lawsuit over Prime subscriptions.

Shares of Amazon rose 3.2% to $240.14 on Tuesday, carrying a Mixed Alpha Score of 45 out of 100 at AlphaScala.

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