Australia's consumer watchdog is taking legal action against Amazon.com, alleging the U.S. retailer used unfair contract terms to introduce advertisements to more than 850,000 local streaming customers.
The Australian Competition and Consumer Commission (ACCC) filed a case with the Federal Court on Tuesday, stating that local Prime contracts contained five unfair clauses. These terms purportedly allowed Amazon to make negative changes to its service unilaterally without providing any benefit in return.
The ACCC stated that the company subsequently relied on one or more of these terms, which allegedly breach Australian consumer law, to introduce ads on its platform.
ACCC Chair Gina Cass-Gottlieb said, "Consumers wishing to avoid ads had no choice but to pay more to maintain the service they originally signed up for."
The legal proceedings against Amazon's Australian subsidiary concern the wording of over one million customer contracts agreed between November 2023 and August 2025.
The ACCC alleges that Amazon introduced ads to its local streaming service in July 2024 and informed customers they would need to pay an extra fee to keep the service ad-free. The regulator noted that more than 850,000 users had previously paid A$79 (US$54.40) for an annual subscription.
Amazon Australia stated it has been cooperating with the ACCC during the investigation and is reviewing the legal filings.
The ACCC further alleges that the U.S. parent company, Amazon, assisted in drafting the contracts and pushed for the introduction of the advertising business in Australia.
The ACCC has asked the court to impose a penalty on Amazon, order it to cover legal costs, and compel the company to provide compensation to affected customers. Under the relevant law, companies can face fines of A$50 million or more for each contravention.
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