The Australian consumer watchdog has commenced new Federal Court proceedings against Amazon Commercial Services Pty Ltd (Amazon AU) for allegedly breaching the Australian Consumer Law.
This is the latest local court case against the global retail and services empire, following another court case by the ACCC against Amazon over a backpack.
The new court case is over Amazon’s Prime subscriptions, alleging unfair contract terms, and later relying on those terms to introduce advertising to its streaming service, Amazon Prime Video. Amazon Prime is a membership platform, which offers free delivery on products and exclusive deals.
Between November 2023 and August 2025, Amazon AU’s Prime contracts with more than one million annual subscribers contained what the ACCC alleges were five unfair contract terms that allowed it to unilaterally make negative changes during the contract period without offering subscribers a remedy.
It is also alleged that Amazon AU later relied on one or more of these unfair terms when it introduced ads to Prime Video in Australia in July 2024. Prior to that, Amazon Prime Video was almost entirely ad-free.
After July 2024, subscribers who wanted to maintain ad-free streaming had to pay an additional $2.99 per month. This was despite annual subscribers already having paid $79 upfront for the service.
“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,” ACCC chair Gina Cass-Gottlieb said.
“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.”
The ACCC also alleges that Amazon.com Services LLC (Amazon US) was knowingly concerned in Amazon AU’s conduct.
It is alleged that Amazon US was involved in drafting the Australian contracts that contained the terms which the ACCC says were unfair. The ACCC also alleges that Amazon US made the decision to introduce advertising to Prime Video globally and helped implement the decision in Australia.
“All businesses are required to balance rights and obligations in their standard form contracts with consumers to ensure they are fair,” Cass-Gottlieb said.
“Contraventions of unfair contract term protections are subject to significant penalties. We strongly encourage all businesses, particularly those offering subscriptions, to review their contracts to ensure they comply with the Australian Consumer Law.”
The ACCC is seeking declarations, penalties, consumer redress, costs and other orders.
This case is one of the first contested matters taken by the ACCC that falls under the new penalty regime for unfair contract terms, which applies to contracts made or renewed from 9 November 2023.
Unfair contract terms in consumer and small business contracts with a focus on harmful cancellation terms is an ACCC compliance and enforcement priority in 2026-27.
The ACCC investigated Amazon AU’s contracts after receiving consumer reports about the introduction of ads to Prime Video in 2024.