Australia’s competition regulator has launched Federal Court proceedings against Amazon’s local unit, alleging it used unfair contract terms to introduce advertisements on Prime Video without offering subscribers a remedy. The Australian Competition and Consumer Commission (ACCC) claims that from November 2023, contracts covering more than one million annual Prime subscribers contained five unfair terms, one or more of which Amazon relied on to insert ads in July 2024. Subscribers who had already paid A$79 upfront for the year were then required to pay an additional A$2.99 per month to retain ad-free streaming. The ACCC is seeking declarations, penalties, consumer redress and costs.

According to the ACCC, the terms allowed Amazon to unilaterally alter the service in a way that left consumers with no choice but to pay more to maintain what they had originally purchased. ACCC Chair Gina Cass-Gottlieb stated that all businesses must balance rights and obligations in standard form contracts to ensure fairness. The regulator also alleges that Amazon.com Services LLC, the US parent, was knowingly concerned in the conduct, having been involved in drafting the Australian contracts and in the global decision to introduce advertising. An Amazon Australia spokesperson said the company is reviewing the case and had cooperated with the investigation.

The lawsuit unfolds amid a broader recalibration of streaming service pricing and packaging across multiple markets. In Brazil, Disney+ raised prices across all plans by up to 7 percent, making it the most expensive platform in that market, while in the United States, Amazon itself is offering Prime members a temporary discount on Apple TV+ subscriptions as part of early Prime Day promotions. Viewed from Sydney, the ACCC’s action signals a willingness to test the boundaries of consumer contract law in digital subscription models, where terms often grant providers wide latitude to modify services post-purchase.

Consumer fairness in digital platforms is under parallel scrutiny in Australia beyond streaming. Uber is defending a new A$5 surcharge on its Assist service, designed for passengers with disabilities, seniors and pregnant women. Disability advocates have labelled the fee a “disability tax”, and the company settled a federal discrimination case late last year without admitting liability, agreeing to an external review of its Australian operations due by 2028. The ACCC investigation into Amazon’s Prime contracts was triggered by consumer complaints after ads appeared in 2024. The case is now before the Federal Court, with no hearing date yet set.