The competitions regulator is accusing Amazon Prime of making negative changes to its platform.
The Australian regulator, the Competition and Consumer Commission (ACCC), has brought forward a legal challenge against Amazon Prime after receiving consumer reports about ads being introduced into its service.
The watchdog has accused the streaming giant of including unfair terms, which allow Amazon to include advertising in its streaming platform. The ACCC alleged that Prime Video has been making negative contract changes for its over one million annual subscribers without offering compensation, Reuters reported.
ACCC chair Gina Cass-Gottlieb, said: “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.
“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.”
From July 2024, those who had subscribed to Prime Video were made to pay an extra AUD$2.99 per month if they wanted to retain ad-free streaming access – even if they already paid the AUD$79 upfront for the service.
The ACCC is seeking penalties, consumer redress, declarations, and costs.
According to the regulator, Amazon.com Services LLC was concerned with the conduct of the Australian unit, and was actively involved in the drafting of the contract in the market – now under dispute.
“We strongly encourage all businesses, particularly those offering subscriptions, to review their contracts to ensure they comply with the Australian Consumer Law,” Cass-Gottlieb urged.
The fine for unfair contract terms under the ACCC are either three times the value of the benefit obtained from the illegal conduct, or 30% of adjusted turnover during the contract period – whichever is higher.
In a statement, Amazon Australia confirmed it was reviewing the case: “We have co-operated with the ACCC throughout its investigation and remain focused on providing the best experience for our Australian customers.”
Amazon Prime has been growing its live sports broadcasting arm – in Australia is has the rights to broadcast both the men’s and women’s ICC cricket matches.
This has led to an increase in sportsbook advertising during ad breaks on the platform, which has also received some backlash from viewers. As a result the Australian government has doubled down on plans to introduce restrictions on gambling ads.
