Australia’s competition regulator has taken Amazon to court. The claim is straightforward. More than a million people paid for one thing and were quietly given something else, with no way to get their money back.
The Australian Competition and Consumer Commission filed proceedings in the Federal Court on Monday against Amazon’s local unit, Amazon Commercial Services, and its American parent business, Amazon.com Services. The case centres on contracts signed by more than one million annual Prime subscribers between November 2023 and August 2025.
The regulator alleges that Amazon’s standard contracts during that period contained five terms it considers unfair. Those terms, it says, gave Amazon the power to make changes that hurt subscribers, with no obligation to offer a refund or any other meaningful compensation in return.
The dispute traces back to a single decision. In September 2023, Amazon announced it would begin showing advertisements on Prime Video in Australia. The change took effect on the 2nd of July 2024. Before that date, Prime Video had been almost entirely free of ads. Subscribers who wanted to keep watching without interruptions were told they would need to pay an additional A$2.99 a month on top of what they already paid.
That extra charge struck many subscribers as unfair given what they had already paid upfront. Annual Prime memberships cost A$79 paid in a single lump sum at the start of the year. People who signed up expecting twelve months of uninterrupted streaming found themselves, partway through their paid year, being asked to pay more simply to keep getting what they thought they had already bought.
According to the regulator, more than 850,000 annual subscribers were affected on the day the change took effect, including more than 600,000 who had signed up or renewed their membership after the new unfair contract terms law came into force on the 9th of November 2023. Those subscribers were shifted onto an advertising-supported version of the service for the remainder of the period they had already paid for, with no refund offered if they chose to leave.
Gina Cass-Gottlieb, the chair of the ACCC, set out the regulator’s position plainly. “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,” she 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.”
She added a broader point aimed at businesses generally, not just Amazon. All companies, she said, are required to balance their rights and obligations fairly in standard contracts they offer to consumers.
According to report, the case is significant for reasons that go beyond Amazon alone. It is one of the first contested cases brought under Australia’s strengthened penalty regime for unfair contract terms, a set of rules that took effect for any contract made or renewed from the 9th of November 2023 onward. Until that regime came into force, businesses found to have included unfair terms in their contracts faced little real financial consequence. The new rules introduce genuine penalties, and this case is shaping up to be an early test of how far those penalties can reach when the company involved is one of the largest in the world.
The regulator’s claim also extends beyond Amazon’s Australian operation. It alleges that the American parent company, Amazon.com Services, was knowingly involved in the conduct, having helped to draft the contracts and having made the underlying global decision to introduce advertising. That widens the case considerably, tying responsibility directly back to Amazon’s headquarters rather than treating it as a problem confined to a local subsidiary.
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There is a detail in the case that the regulator has highlighted as particularly telling. After the disputed terms were first used to bring in advertising, Amazon later changed its Australian contracts to include a right to a pro rata refund for affected subscribers. The ACCC argues that this later change shows the original terms were never genuinely necessary to protect Amazon’s legitimate business interests. If the company could function perfectly well with a fairer refund policy afterwards, the regulator suggests, there was no good reason it could not have offered the same protection from the start.
Amazon responded to the filing in measured terms. A spokesperson for Amazon Australia told CNBC that the company was reviewing the case in detail, had cooperated with the regulator throughout its investigation, and remained focused on providing the best experience for its Australian customers.
The regulator is asking the court for formal declarations against Amazon, financial penalties, compensation for affected subscribers, legal costs and any other orders the court considers appropriate. No hearing date has yet been set.
For the more than a million Australians caught up in the dispute, the outcome could mean real compensation if the court sides with the regulator. For Amazon and other large subscription businesses operating in Australia, the case sends a clear signal that the country’s competition watchdog intends to treat unfair contract terms in popular consumer services as a genuine enforcement priority, not simply a matter for customer complaint forms and quiet policy tweaks.
About the Author
Marcel Chidozie is a tech analyst and writer covering foreign news, fintech, and emerging technologies at TechRegard. Based in Nigeria, He's passionate about translating complex tech developments into compelling, accessible stories for diverse audiences. His work focuses on how technology shapes innovation across Africa and globally.
