The Australian Competition and Consumer Commission has launched Federal Court proceedings against Amazon Commercial Services Pty Ltd, alleging the US retail giant buried unfair contract terms in its Prime subscription agreements, then used those buried clauses to quietly roll advertising into a service more than one million Australians paid to be ad-free.

The ACCC alleges Amazon’s annual Prime contracts, in place between November 2023 and August 2025, contained five unfair terms that allowed the company to unilaterally make negative changes during the contract period without offering subscribers any remedy.

Amazon pulled the trigger on those terms in July 2024, introducing ads to Prime Video in Australia, a platform previously almost entirely free of advertising. Subscribers who wanted to keep the ad-free experience they originally paid for were hit with an additional $2.99 per month charge, on top of the $79 annual fee they had already paid upfront.

“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.

The ACCC is also pursuing Amazon.com Services LLC in the United States, alleging the parent entity was knowingly involved in drafting the Australian contracts and made the global decision to introduce advertising to Prime Video, including its implementation in Australia.

The case arrives as broader concerns mount over the conduct of consumer electronics platforms. Samsung and LG Electronics are facing mounting criticism for converting their smart TV operating systems into advertising and data revenue engines, with one industry observer noting that consumers are paying premium prices for LG televisions only to find them increasingly laden with advertising, with LG openly  harvesting viewing data for third-party brands, often without the knowledge of the buyer and then selling it for millions of dollars.

For Amazon, the legal exposure is significant. This is one of the first contested ACCC matters under the new penalty regime for unfair contract terms, which applies to contracts made or renewed from 9 November 2023. The ACCC is seeking declarations, penalties, consumer redress, costs and other orders.

“All businesses are required to balance rights and obligations in their standard form contracts with consumers to ensure they are fair,” Ms Cass-Gottlieb said. “We strongly encourage all businesses, particularly those offering subscriptions, to review their contracts to ensure they comply with the Australian Consumer Law.”
Unfair cancellation and subscription terms are a declared ACCC enforcement priority for 2026-27, signalling the Amazon case is unlikely to be the last action of its kind.