Amazon sued over ‘unfair’ Prime advertising changes
Customers of Amazon’s streaming service Prime have no choice but to pay more if they want to avoid ads under allegedly unfair contract terms, according to a lawsuit.
Australia’s consumer watchdog said on Tuesday it had launched Federal Court proceedings against Amazon AU, alleging that Amazon AU used unfair contract terms to make negative changes to Prime without offering customers a solution.
The lawsuit alleges that contracts with more than one million Prime subscribers contained five unfair contract terms, one or more of which it relied on to deliver ads in July 2024.
Subscribers who wanted to remain ad-free after July 2024 had to pay an additional $2.99 per month, even though they had paid the annual $79 upfront.
“Consumers looking to avoid ads are left with no choice but to pay more to maintain the service they originally signed up for,” said Gina Cass-Gottlieb, chair of the Australian Competition and Consumer Commission.
Amazon US was allegedly involved in drafting the Australian contracts, which included terms the ACCC said were unfair, and made the decision to serve ads globally on Prime.
“All businesses need to balance the rights and obligations in standard form contracts with consumers to ensure they are fair,” Ms Cass-Gottlieb said.
The watchdog is seeking penalties for Amazon and consumer compensation, among other remedies.
The ACCC investigated Amazon AU’s contracts after receiving consumer reports about the inclusion of ads on Prime.
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