ACCC sues Amazon over one million contracts
- The Australian Competition and Consumer Commission has launched Federal Court proceedings against Amazon over alleged unfair contract terms used to introduce streaming advertisements.
- Amazon shares moved up to $240.14 following the announcement of the regulatory lawsuit.
- The regulator is prioritising compliance enforcement for subscription contracts during the 2026-27 period to safeguard consumer choices.
The Australian Competition and Consumer Commission has commenced Federal Court proceedings against Amazon (NASDAQ:AMZN) for allegedly including unfair contract terms that affected more than one million Australian subscribers.
The legal action centres on the platform's July 2024 rollout of advertisements on its Prime Video streaming service, which was previously almost entirely ad-free.
“We allege that Amazon AU included multiple unfair terms in its contracts with Australian annual Prime subscribers, and it then relied on some of these terms to bring ads onto Amazon Prime Video,” said ACCC Chair Gina Cass-Gottlieb.
Affected annual subscribers who paid an upfront fee of $79 were required to pay an additional $2.99 per month to avoid seeing advertisements.
Following the announcement, the Amazon share price was up at $240.14.
The regulator stated that targeting harmful standard form contracts and cancellation policies is a compliance priority for the 2026-27 financial year.
The retail company originally introduced its Prime subscription service to the Australian market in June 2018 to combine shopping delivery benefits with digital streaming options.
