Winners & losers: It's been a couple of years since Amazon unexpectedly introduced ads to its Prime Video streaming service, then asked people to pay to remove them. But there's still plenty of anger over its actions. In Australia, the country's competition regulator is taking the company to court over the matter.
The Australian Competition and Consumer Commission (ACCC) accuses Amazon Commercial Services Pty Ltd, the local operator of Prime, of breaching Australian Consumer Law.
The regulator says that Amazon did this by including unfair contract terms in Prime subscription agreements. It then allegedly relied on those terms to put advertising into Prime Video. Amazon.com Services LLC is also named because the ACCC believes it was knowingly involved.
According to the ACCC's statement, the case focuses on annual Prime contracts used between November 1, 2023, and August 18, 2025.
The watchdog says those agreements contained five terms that let Amazon make materially adverse changes to Prime services or the contracts themselves, including Prime Video, without giving annual subscribers a contractual right to a pro-rata refund or other meaningful redress.
Prime Video in Australia was almost entirely ad-free before July 2, 2024. Amazon told subscribers in May 2024 that anyone who wanted to keep watching without ads would need to pay another A$2.99 per month, even though annual Prime customers had already paid A$79 upfront.
That's going to sound familiar to anyone who watched the same thing happen elsewhere. As everyone knows, Amazon didn't create a cheaper ad-supported tier for new users, as we'd seen with other streamers. It inserted ads into an existing paid service and then made the previous experience a paid upgrade.
The ACCC says more than 850,000 annual Prime subscribers had already paid for a year of service when the ads arrived, including more than 600,000 who had subscribed or renewed after Australia's unfair contract term penalty regime took effect on November 9, 2023. More than 1 million annual subscribers were exposed to the relevant terms during the wider period.
Amazon Australia said it is reviewing the case and had cooperated with the ACCC throughout its investigation. The regulator is seeking declarations, penalties, consumer redress, costs, and other orders.
There was also US fallout from the change, of course. It was exacerbated when Amazon also removed Dolby Vision and Dolby Atmos from the ad-supported Prime Video tier and kept them for users paying the extra ad-free fee.
A proposed US class action over the ad rollout has since gone badly for subscribers. In July 2025, a Washington federal judge dismissed the amended complaint with prejudice, ruling that Amazon's addition of ads was a permitted benefit modification rather than a subscription price increase. Subscribers began an appeal to the Ninth Circuit.
Australia's case is different than the US class action. It asks if a company can write contracts that let it make paid services worse after people have already handed over a year of money.