Australia’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC) has taken Amazon to the Federal Court over how the company introduced advertising to Prime Video. The ACCC alleges that Amazon’s Australian contracts contained five unfair terms that allowed the company to make negative changes to its service without offering subscribers any compensation or the right to a refund. It then relied on those terms in July 2024 to introduce ads, after which subscribers who wanted to keep watching without advertisements had to pay an extra A$2.99 per month, despite having already paid A$79 upfront for an annual subscription.
“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,” ACCC Chair Gina Cass-Gottlieb said. The regulator is seeking financial penalties, consumer redress and costs. Under Australian consumer law, the maximum penalty for each breach of unfair contract term protections is A$50 million, three times the value of the benefit obtained, or 30% of adjusted turnover during the contract period, whichever is highest.
The ACCC also alleged that Amazon’s US parent company was involved in drafting the local contracts and made the global decision to introduce advertising to Prime Video. Amazon Australia said it had cooperated with the investigation and was reviewing the legal filings.
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The situation in Australia is already the reality for Indian Prime subscribers. Amazon introduced ads to Prime Video in India from June 2025, with subscribers needing to pay an additional Rs 699 per year or Rs 129 per month to access an ad-free experience on top of their existing membership. The standard Prime plan costs Rs 1,499 per year or Rs 299 per month and now includes ads by default. A cheaper Prime Lite tier at Rs 799 per year also exists, but it too carries ads and restricts viewing to a single device without TV access. Even subscribers who pay the ad-free add-on will still see advertisements during live TV and sports events.
Amazon said at the time that the move was aimed at funding continued content investment and that it would carry “meaningfully fewer ads than linear TV and other streaming services.” The company raised standard Prime membership prices in India back in 2023, from Rs 999 to Rs 1,499 annually, making the ad addition a second successive change that cost subscribers more.
No regulatory action has been announced in India over the change. The Australia case, however, signals that adding a paid tier to remove ads that subscribers did not originally sign up for is beginning to face legal scrutiny and sets a precedent worth watching for other markets where Amazon has made the same move.
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