Australia's competition regulator takes Amazon to court over alleged unfair Prime subscription contract terms

Australia's competition watchdog is taking legal action against Amazon's Australian division, accusing the company of imposing unfair conditions in its Prime subscription agreements. The Australian Competition and Consumer Commission (ACCC) revealed on Tuesday that Amazon Australia is under scrutiny for changes made to Prime Video contracts between November 2023 and August 2025. According to the ACCC, these contracts compelled over a million annual Prime subscribers in Australia to either accept advertising on the streaming platform or pay an extra AU$2.99 (approximately $2.05) monthly for an ad-free experience. This shift occurred after Amazon introduced ads into Prime Video in July 2024, with subscribers having no option for refunds should they choose to cancel their subscriptions. Gina Cass-Gottlieb, chair of the ACCC, stated, "We allege that Amazon AU incorporated several unfair terms in its contracts with Australian annual Prime subscribers, which it then leveraged to implement ads on Amazon Prime Video." The ACCC is pursuing consumer compensation, penalties, and various other legal remedies. The investigation into Amazon's local contracts was prompted by consumer complaints following the rollout of advertising on Prime Video. An Amazon Australia representative responded to inquiries, stating, "We are thoroughly reviewing the case filed by the ACCC. We have cooperated with the ACCC throughout its investigation and are focused on ensuring the best experience for our Australian customers." This legal action arrives on the heels of a 3.2% increase in Amazon's shares, following reports of unexpectedly high consumer demand during the recent extended Prime Day event in the United States. Data from Adobe Analytics indicated that U.S. online shoppers spent over $26.4 billion during the promotional period from June 23 to June 26.