Australia’s consumer watchdog has sued Amazon, claiming the tech giant introduced adverts in Prime Video using allegedly unfair contract terms.

The Australian Competition and Consumer Commission (ACCC) said Amazon had broken consumer protection law by making the unfair contracts with over a million annual subscribers between November 2023 and August 2025.

“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.

Amazon has been approached for comment.

For more than a decade, Prime Video was a commercial-free streaming offering that was included as part of Amazon’s popular Prime subscription, which is sold as an upgrade on its core delivery service.

Prime became available in Australia in 2018. It started to roll out advertising in the service globally in early 2024.

When Amazon began that year to include ads within Prime Video, it told subscribers in Australia they would need to pay an additional fee each month in order to keep the service free of ads, driving the monthly price up to 12.99 Australian dollars.

At that point, the ACCC said over 850,000 people in Australia had already paid for a year’s worth of Prime service.

“Those subscribers were provided with a degraded, ad-supported Prime Video service for the balance of their prepaid term unless they paid for the ad-free option”, the ACCC added in a filing, external.

The ACCC said Amazon did this by relying on five unfair terms in contracts with over a million customers signed between 1 November 2023 and 18 August 2025.

“Those contracts included five terms permitting [Amazon Australia] to unilaterally make materially adverse changes to its services (including, but not limited to, Prime Video) and the terms governing those services, without any contractual entitlement for subscribers to receive refunds or other meaningful redress,” the ACCC said.

Amazon’s treatment of its users has come under government scrutiny before.

In the US, the Federal Trade Commission (FTC) in recent years has taken legal action against Amazon on claims that the company would sign people up for Prime without their consent, external, and then make it difficult for people to cancel a subscription.

The company on Tuesday also agreed to pay an FTC fine, external to resolve claims that it created a “Kafkaesque ordeal” for people who were victims of online shopping fraud.

In the UK, the government has previously investigated Amazon’s method of listing goods for sale, and the proliferation of fake reviews of products.