Australia’s ACCC sues Amazon over ads forced on 850,000 Prime subscribers

Australia’s competitors regulator yesterday filed Federal Court docket proceedings in opposition to Amazon, alleging the corporate included 5 unfair contract phrases in its Prime subscription agreements after which used these phrases to introduce promoting into Prime Video with out providing subscribers any significant treatment.

The Australian Competitors and Client Fee filed the case within the Victoria District Registry in opposition to Amazon Industrial Providers Pty Ltd (Amazon AU) and Amazon.com Providers LLC (Amazon US). The concise assertion, dated 29 June 2026 and ready by counsel Andrew McClelland KC and Sarah Zeleznikow, units out the ACCC’s declare underneath the Australian Client Regulation (ACL).

What the case includes

In accordance with the ACCC, the continuing considerations commonplace kind client contracts between Amazon AU and multiple million annual Prime subscribers throughout the interval from 1 November 2023 to 18 August 2025. Throughout that window, the contracts contained 5 phrases that, the ACCC alleges, allowed Amazon AU to make materially antagonistic modifications to its companies – and to the phrases governing these companies – with out giving subscribers any contractual entitlement to a professional rata refund or different significant redress.

The related interval is important not solely in scope however in timing. Australia launched enhanced penalties for unfair contract phrases in November 2023. This case is, based on the ACCC, one of many first contested issues to fall underneath that new penalty regime – making use of solely to contracts made or renewed from 9 November 2023. That makes the motion a take a look at of the strengthened enforcement framework, not only a dispute about streaming charges.

Through the interval, an annual Prime subscription value $79 per yr. A month-to-month subscription value $9.99 per 30 days. The alleged contraventions concern solely annual contracts.

The 5 phrases underneath problem

In accordance with the concise assertion, the contracts in drive initially of the related interval have been constructed on three paperwork: Circumstances of Use dated 20 October 2023, Prime Video Phrases of Use dated 31 October 2023, and Prime Phrases and Circumstances dated 23 October 2023 (later revised on 31 March 2025).

The ACCC teams the challenged phrases into two classes. The primary, variation of companies phrases, gave Amazon AU the best to alter what subscribers acquired. Clause 15 of the Circumstances of Use said: “We reserve the best to stop offering any Amazon Service, or any half thereof, to discontinue any Amazon Service and to make modifications to any Amazon Providers, together with including or eradicating content material from Amazon Providers at any time.” Clause 6(d) of the Video Phrases and clause 4 of the Prime Phrases carried equal provisions for the streaming and membership companies respectively.

The second class, variation of settlement phrases, allowed Amazon AU to change the contracts themselves. Clause 16 of the Circumstances of Use reserved the best “to make modifications to any Circumstances of Use and Service Phrases at any time by posting the modifications on Amazon.com.au.” Clause 6(e) of the Video Phrases mirrored this for the Prime Video settlement.

Every time period required Amazon AU to present advance discover of materially antagonistic modifications. The ACCC argues that this discover requirement didn’t treatment the underlying imbalance. Subscribers might cancel, however had no contractual proper to a refund for the unused portion of their pay as you go annual subscription.

The promoting rollout

In accordance with the concise assertion, on 22 September 2023 Amazon AU introduced it will introduce commercials into Prime Video films and tv reveals in Australia in 2024. On 21 Might 2024, subscribers acquired notification – attributed within the submitting to Amazon US, alternatively Amazon AU – that the change would take impact from 2 July 2024. To proceed accessing advertisement-free content material, subscribers would wish to pay an extra $2.99 per 30 days, described because the Advert-Free Possibility.

On 2 July 2024, Amazon AU carried out the change. Previous to that date, nearly all Prime Video content material had been delivered advertisement-free. As at 2 July 2024, over 850,000 Prime subscribers had paid annual charges for his or her subscriptions. Of these, over 600,000 had subscribed or renewed since 9 November 2023 – the date from which the brand new penalty regime applies.

These subscribers got a degraded, ad-supported service for the remainder of their pay as you go time period. In the event that they wished to keep away from commercials, they confronted an extra month-to-month cost. In the event that they cancelled, that they had no contractual entitlement to recuperate the unused portion of their $79 annual price.

The ACCC alleges Amazon AU relied, or presupposed to rely, on a number of of the variation of companies phrases when implementing this alteration – a violation of part 23(2C) of the ACL. The introduction of Prime Video ads in Australia adopted a world rollout that started in the USA in January 2024 and expanded to a number of markets all through that yr.

Why the phrases are alleged to be unfair

Below part 24 of the ACL, a time period in a regular kind client contract is unfair if it causes a major imbalance within the events’ rights and obligations, shouldn’t be moderately essential to guard the legit pursuits of the get together who advantages from it, and would trigger detriment if relied upon.

In accordance with the concise assertion, the related phrases meet all three standards. They granted Amazon AU unilateral energy to make materially antagonistic modifications with none significant constraint. Annual subscribers, having made a considerable prepayment, had no equal proper to range, refuse, or recuperate funds. The ACCC contends that discover of modifications – with out the best to a refund – doesn’t deal with that imbalance.

The ACCC additionally factors to what occurred after the occasions in dispute as proof the phrases have been pointless. In accordance with the submitting, Amazon AU subsequently amended clause 4 of the Revised Prime Phrases and clauses 6(d) and 6(e) of the Video Phrases to introduce a proper to a professional rata refund the place annual subscribers cancelled in response to materially antagonistic modifications. The ACCC argues this modification demonstrates the phrases have been by no means required to guard Amazon AU’s legit pursuits; the corporate was capable of run its enterprise underneath revised phrases that supplied subscribers a treatment.

Accessorial legal responsibility for Amazon US

The continuing names Amazon.com Providers LLC as a second respondent, alleging it was straight or not directly knowingly involved in Amazon AU’s contraventions. In accordance with the concise assertion, Amazon US was concerned in drafting the related phrases. It was additionally liable for deciding to introduce promoting into Prime Video globally – together with in Australia – and assisted in planning, asserting, and implementing that call within the Australian market.

Consequently, the ACCC alleges Amazon US can also be liable to pay a pecuniary penalty underneath part 224(1)(e) of the ACL.

Each Amazon AU and Amazon US are owned by the US entity Amazon.com, Inc. Amazon launched Prime subscriptions in Australia in June 2018.

Scale and the hurt alleged

In accordance with the ACCC, multiple million annual Prime subscribers have been uncovered to the chance that Amazon AU would depend on the related phrases to unilaterally degrade their companies. Due to the phrases’ breadth, the ACCC contends, Amazon AU might achieve this with out significant constraint and in a manner that considerably altered the companies or the contractual framework itself.

In relation to the particular promoting rollout, the ACCC’s hurt case rests on the 850,000-plus annual subscribers who had paid upfront as at 2 July 2024. These subscribers acquired a materially degraded service for the steadiness of their subscription. They have been, within the ACCC’s framing, disadvantaged of the service they paid for on the time of contracting – with none contractual entitlement to redress.

What the ACCC is searching for

The ACCC is searching for declarations that the phrases have been unfair and that Amazon AU contravened the ACL, together with monetary penalties, client redress, prices, and different orders. The regulator has not specified a penalty determine. Contraventions of the ACL’s unfair contract phrases provisions since November 2023 carry vital civil penalties.

ACCC Chair Gina Cass-Gottlieb said that “customers who wished to keep away from adverts have been left with no selection however to pay extra to take care of the service they’d initially signed up for.” She additionally famous that “contraventions of unfair contract time period protections are topic to vital penalties” and mentioned the ACCC would encourage all companies providing subscriptions to evaluate their contracts for ACL compliance.

The ACCC investigated Amazon AU’s contracts after receiving client experiences concerning the introduction of commercials in 2024.

Broader context for the digital promoting market

The case arrives at a second when the ACCC has set unfair contract terms – particularly in subscription services – as a compliance and enforcement priority for 2026-27. The regulator has in latest months pursued a variety of enforcement actions in opposition to digital companies, from subscription traps by JustAnswer to product safety cases against Amazon’s fulfilment operations.

For advertisers and media consumers working within the Australian market, the case raises a structural query about how streaming platforms can change their stock and pricing fashions halfway by means of subscriber contracts. Amazon’s Prime Video promoting enterprise has expanded considerably for the reason that January 2024 launch. Prime Video’s global ad-supported audience reached 315 million viewers by Q4 2025, and the ad-free possibility in Australia was later repriced when Amazon launched the Prime Video Ultra tier at $4.99 per month in early 2026 – a 67% improve from the unique $2.99 price that sits on the centre of this litigation.

The ACCC’s earlier five-year Digital Platform Providers Inquiry, which concluded in March 2025 with 35 suggestions, had already identified lack of transparency and the ability of platforms to degrade service quality as a key consumer risk. That inquiry additionally discovered that 72% of Australian consumers surveyed had encountered potentially unfair marketplace practices in a 12-month window. The Amazon proceedings may be learn as a concrete enforcement step following years of inquiry-level concern.

For companies operating subscription fashions that bundle a number of companies – and that will want to alter these companies over time – the case is a direct sign that commonplace kind contracts can not give one get together limitless unilateral variation rights and not using a corresponding mechanism for client redress.

Timeline

• June 2018 – Amazon launches Prime subscriptions in Australia
• 20 October 2023 – Amazon AU publishes Circumstances of Use, together with clauses 15 and 16
• 23 October 2023 – Prime Phrases and Circumstances printed, together with clause 4
• 31 October 2023 – Prime Video Phrases of Use (AU) printed, together with clauses 6(d) and 6(e)
• 1 November 2023 – Begin of the related interval as outlined within the ACCC submitting
• 9 November 2023 – Date from which the brand new ACL penalty regime for unfair contract phrases applies; ACCC alleges Amazon AU’s contraventions of s 23(2A) start on this date
• 22 September 2023 – Amazon AU declares it is going to introduce commercials to Prime Video in Australia in 2024
• 21 Might 2024 – Amazon US (or Amazon AU) notifies annual Prime subscribers that commercials will begin from 2 July 2024 and that ad-free entry will value $2.99 per 30 days additional
• 2 July 2024 – Amazon AU introduces commercials to Prime Video in Australia; over 850,000 annual subscribers affected; over 600,000 had subscribed or renewed since 9 November 2023
• 31 March 2025 – Amazon AU publishes Revised Prime Phrases, which introduce a proper to a professional rata refund for materially antagonistic modifications – phrases not current within the unique contracts
• 18 August 2025 – Finish of the related interval as outlined within the ACCC submitting
• 29 June 2026 – ACCC recordsdata concise assertion within the Federal Court docket of Australia, Victoria District Registry; case is dated and authorized 29 June 2026
• 30 June 2026 – ACCC publishes media launch confirming the proceedings

Abstract

Who: The Australian Competitors and Client Fee (ACCC) as applicant; Amazon Industrial Providers Pty Ltd (Amazon AU) and Amazon.com Providers LLC (Amazon US) as respondents.

What: Federal Court docket proceedings alleging Amazon AU included 5 unfair contract phrases in its commonplace kind annual Prime contracts – phrases that allowed Amazon to alter companies or contract situations unilaterally, with out offering subscribers any contractual entitlement to a refund or redress. The ACCC additionally alleges Amazon AU relied on these phrases to introduce commercials to Prime Video from 2 July 2024 and cost $2.99 per 30 days additional for ad-free entry. Amazon US is alleged to have been knowingly concerned within the contraventions. The ACCC is searching for declarations, penalties, client redress, and different orders.

When: The alleged contraventions span 1 November 2023 to 18 August 2025. The core promoting change took impact on 2 July 2024. The concise assertion was filed and authorized on 29 June 2026.

The place: Federal Court docket of Australia, Victoria District Registry. The conduct at situation involved Amazon Prime subscriptions bought in Australia.

Why: The ACCC contends that commonplace kind contracts can not give one get together limitless energy to degrade companies paid for prematurely, with out offering customers a significant treatment. The case is among the first contested actions underneath Australia’s enhanced unfair contract phrases penalty regime, which took impact in November 2023, and falls throughout the ACCC’s said 2026-27 enforcement priorities focusing on subscription traps and dangerous cancellation phrases.