The Australian Competition and Consumer Commission filed a lawsuit against Amazon on June 29, 2026 [1], alleging the company used unfair contract terms.
The legal action targets how Amazon introduced advertising to its Prime Video streaming service. The watchdog argues that the company unilaterally changed the terms of service to include ads while requiring existing subscribers to pay an additional fee to maintain an ad-free experience.
According to the ACCC, these terms are unfair because they allow Amazon to implement advertisements without offering a free opt-out, or providing refunds to those who had already paid for a subscription. The lawsuit was filed in the Federal Court of Australia [1].
Discrepancies exist regarding the scale of the impact. One report states that more than 850,000 people had already paid for an annual Prime Video subscription before the ads were introduced [3]. Another source indicates the number of affected annual subscribers is over one million [4].
The ACCC said the company's approach breached consumer protection laws by forcing users into a paid upgrade to avoid a service change they did not agree to. The case focuses on whether a service provider can fundamentally alter the nature of a paid product—moving from ad-free to ad-supported—without providing a proportional remedy to the consumer.
Amazon's Australian unit is now facing a judicial review of these practices to determine if the contract terms violated the Competition and Consumer Act.
“The ACCC alleges Amazon used unfair contract terms to force existing subscribers to pay extra to avoid ads.”
This case signals a tightening of regulatory scrutiny over 'subscription creep,' where digital services gradually reduce value or add costs to existing plans. If the court rules against Amazon, it could set a legal precedent in Australia preventing streaming platforms from introducing ads to legacy paid tiers without offering a refund or a free alternative.
