The ACCC has commenced Federal Court proceedings against Amazon Commercial Services Pty Ltd (Amazon AU) for allegedly breaching the Australian Consumer Law by including unfair contract terms in its Prime subscriptions contracts, and later relying on those terms to introduce advertising to its streaming service, Amazon Prime Video.
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," Ms 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.
Note
Unfair contract term protections safeguard consumers and small businesses - who often have limited bargaining power, expertise and ability to negotiate - from harmful standard form contract terms.
Contract terms are unfair if they:
- cause a significant imbalance in the rights and obligations of the parties under the contract
- are not reasonably necessary to protect the legitimate interests of the party who gets an advantage from the term, and
- would cause financial or other harm to the other party if enforced.
In deciding whether a term is unfair, a court can consider any matters it thinks relevant but it must consider the contract as a whole and whether the term is transparent.
Section 25 of the Australian Consumer Law provides examples of potentially unfair contract terms, which includes terms that permit one party to unilaterally vary the terms of the contract, or the characteristics of the services to be supplied.
Unfair contract term protections have been included in the Australian Consumer Law since it first came into effect in 2010.The test for whether a term is unfair has remained the same since 2010.
Since November 2023, penalties have applied to proposing or relying on unfair contract terms in contracts which were made or renewed from that date.
Background
Both Amazon AU and Amazon US are owned by the US entity Amazon.com, Inc. Amazon launched its Prime subscriptions in Australia in June 2018.
Amazon Prime is a paid subscription offered by Amazon AU which provides members access to a variety of benefits including access to the Prime Video streaming service, as well as delivery and shopping benefits. Amazon Prime subscribers can subscribe on a monthly basis for $9.99 each month or purchase an annual (12-month) subscription for $79 upfront.
Subscribers to Amazon Prime enter into a contract with Amazon AU for a subscription through a standardised online sign-up process.
Concise statement
This document contains the ACCC's initiating court document in relation to this matter. We will not be uploading further documents in the event this initial document is subsequently amended.
ACCC v Amazon Concise Statement ( PDF 381.49 KB )
