Amazon Prime Video ad insertion and ACCC lawsuit: Difference between revisions

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 The ACCC's concise statement alleges that as of July 2, 2024, more than 850,000 Prime subscribers had paid an annual fee for a subscription that included Prime Video, more than 600,000 of whom had subscribed or renewed since November 9, 2023.<ref name="concise" /> Writing in The Conversation, Paterson said those subscribers were left with ''"a degraded Prime Video service for the balance of their subscription,"'' and that consumers who chose to cancel were not offered ''"a pro rata refund or other meaningful redress."''<ref name="conversation" />
-The Australian rollout followed a change in the United States, where Amazon introduced ads to standard Prime Video in 2024. American members could opt out of the ads only by paying an additional US$2.99 per month on top of the annual US$139 Prime fee.<ref name="deadline" />
+The Australian rollout followed a change in the United States, where Amazon introduced ads to standard Prime Video in 2024. American members could opt out of the ads only by paying an additional US$2.99 per month on top of the annual US$139 Prime fee.<ref name="deadline" /> Amazon's approach differed from Netflix, which added a lower-priced ad tier while keeping its ad-free plans. Netflix co-CEO Greg Peters said in 2024 that the company had considered making ads the default, but chose not to, citing its ''"long history of not having ads"'' and a preference not to force members ''"into a change and get them mad."''<ref name="deadline" />
 == ACCC Federal Court action ==
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 == Change-in-benefits defense and US precedent ==
-A comparable class action over the 2024 Prime Video ads had already been dismissed in the United States. In July 2025, U.S. District Judge Barbara J. Rothstein, sitting in Washington state, rejected the argument that adding ads amounted to a price increase.<ref name="deadline" /> Rothstein wrote that the addition of ads ''"constituted a change in subscription benefits as opposed to a price increase,"'' and that all subscribers agree to a contract when they join Prime, giving Amazon the ability to alter the nature of the services provided.<ref name="deadline" />
+The United States had already seen a comparable class action over the 2024 Prime Video ads. Wilbert Napoleon sued Amazon.com, Inc. on February 9, 2024 in the U.S. District Court for the Western District of Washington (''Napoleon v. Amazon.com, Inc.'', Case 2:24-cv-00186), pleading seven counts, including breach of contract and state consumer-protection claims, over the ads and the US$2.99 charge to remove them.<ref name="napoleon" /> In July 2025, U.S. District Judge Barbara J. Rothstein dismissed the suit, rejecting the argument that adding ads amounted to a price increase.<ref name="deadline" /> Rothstein wrote that the addition of ads ''"constituted a change in subscription benefits as opposed to a price increase,"'' and that all subscribers agree to a contract when they join Prime, giving Amazon the ability to alter the nature of the services provided.<ref name="deadline" /> She acknowledged that for members who paid to keep their streaming ad-free, the change had an effect on their wallets she called ''"tantamount"'' to a price increase, then explained why she still treated it as a benefit change:
-Paterson wrote that the Australian case may be legally difficult for a different reason. She noted that the ACCC's own published guidance suggests a fair contract should let consumers terminate without a penalty after a unilateral change from the supplier, but does not explicitly require pro rata refunds, which she said could form part of Amazon's defence.<ref name="conversation" /> She has argued for years that unilateral variation clauses are inherently unfair:
+<blockquote>''The Court, however, is compelled to maintain the distinction between a benefit removal and a price increase for several reasons. First, this distinction is repeatedly reinforced in the contracts themselves. Benefit modifications and removals are expressly authorized throughout both contracts; price increases are circumscribed and allowed only according to certain conditions.''</blockquote><ref name="deadline" />
+Rothstein noted that the subscription fee did not change for members who took no action, and that ''"the only subscribers who experienced any increase in price were those who voluntarily chose to incur one by affirmatively opting in to the $2.99-a-month charge to avoid ads."''<ref name="deadline" />
+Paterson wrote that the Australian case may be legally difficult for a different reason. She noted that the ACCC's own published guidance suggests a fair contract should let consumers terminate without a penalty after a unilateral change from the supplier, but does not explicitly require pro rata refunds, which she said could form part of Amazon's defence.<ref name="conversation" /> By the time the case was filed, Amazon had amended its Prime and Prime Video terms to add a pro rata refund for annual subscribers who cancel after a materially adverse change, a change the ACCC records in its concise statement and Paterson confirmed was in effect on her own account.<ref name="concise" /><ref name="conversation" /> She has argued for years that unilateral variation clauses are inherently unfair:
 <blockquote>''The whole purpose of entering into a contract is to lock in a promise to supply goods or services on agreed terms. If the supplier ... can change the terms at any time, in any way it likes, it undermines the whole point of making a contract.''</blockquote><ref name="conversation" />
 Paterson added that with Amazon US also named, the case would be watched in other jurisdictions with similar unfair-contract-term laws, such as the United Kingdom and the European Union.<ref name="conversation" />
+== German court ruling ==
+A court in another jurisdiction reached the opposite result on the same practice. In December 2025, the Regional Court of Munich I (Landgericht München I) granted a claim brought against Amazon Digital Germany GmbH by the Federation of German Consumer Organisations (vzbv), Case 33 O 3266/24.<ref name="lgmunich" /><ref name="vzbv" /> The consumer association had challenged Amazon's move to add advertising to Prime Video, announced in a January 3, 2024 email telling customers that from February 5, 2024 titles could carry limited advertising, as an impermissible unilateral change to the contract, and had argued the email was misleading under Section 5 of Germany's Unfair Competition Act because it suggested customers would from then on receive only an ad-supported service.<ref name="lgmunich" /> The judgment is not yet final.<ref name="vzbv" />
 == Prime Video Ultra ==
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 <ref name="deadline">{{Cite web |author=Dade Hayes |title=Class-Action Suit Against Amazon For Putting Ads On Prime Video Dismissed By Federal Judge |url=https://deadline.com/2025/07/class-action-suit-against-amazon-ads-prime-video-dismissed-1236461429/ |work=Deadline |date=2025-07-17 |url-status=live |archive-url=https://web.archive.org/web/20250726010510/https://deadline.com/2025/07/class-action-suit-against-amazon-ads-prime-video-dismissed-1236461429/ |archive-date=2025-07-26 |access-date=2026-07-05}}</ref>
 <ref name="primevideoultra">{{Cite web |author=Amazon Staff |title=Prime Video's Ad Free subscription is now Prime Video Ultra for $4.99 a month |url=https://www.aboutamazon.com/news/entertainment/prime-video-ultra-ad-free-streaming-subscription |publisher=Amazon |date=2026-03-13 |url-status=live |archive-url=https://web.archive.org/web/20260505221059/https://www.aboutamazon.com/news/entertainment/prime-video-ultra-ad-free-streaming-subscription |archive-date=2026-05-05 |access-date=2026-07-05}}</ref>
+<ref name="napoleon">{{Cite web |title=Napoleon v. Amazon.com, Inc., class action complaint (Case 2:24-cv-00186) |url=https://www.classaction.org/media/napoleon-v-amazon-com-inc.pdf |publisher=U.S. District Court for the Western District of Washington |date=2024-02-09 |format=PDF |access-date=2026-07-05}}</ref>
+<ref name="lgmunich">{{Cite web |title=Einseitige Abschaffung der Werbefreiheit durch Streaming-Anbieter |trans-title=Unilateral removal of ad-free service by a streaming provider |url=https://www.justiz.bayern.de/gerichte-und-behoerden/landgericht/muenchen-1/presse/2025/13.php |publisher=Landgericht München I |date=2025-12-17 |language=de |access-date=2026-07-05}}</ref>
+<ref name="vzbv">{{Cite web |title=Urteil gegen Amazon: Einführung von Werbung bei Prime Video war unzulässig |trans-title=Judgment against Amazon: introducing ads on Prime Video was impermissible |url=https://www.vzbv.de/urteile/urteil-gegen-amazon-einfuehrung-von-werbung-bei-prime-video-war-unzulaessig |publisher=Verbraucherzentrale Bundesverband |date=2025-12-16 |language=de |access-date=2026-07-05}}</ref>
 </references>