According to The Hollywood Reporter, a lawsuit has been filed against Amazon, alleging that the company misled Prime members by charging extra for ad-free movie and TV streaming. A proposed class action lawsuit was filed on Friday in federal court in California. It is filed on behalf of users who saw their subscription terms changed when Amazon switched to making its ad tier the default for its more than 100 million users
The lawsuit alleges breach of contract and violations of state consumer protection laws.
According to The Hollywood Reporter, Amazon, which opted not to comment,”announced in 2023 that it would begin showing advertisements to all Prime Video subscribers.” When the platform implemented the change last month, the service became the biggest ad-supported subscription streamer and a streaming-ad juggernaut overnight. The cost of watching without advertisements is $2.99 more per month for users.
However, customers who had committed to yearly subscriptions were also affected when Amazon changed its terms. They claim the modification is misleading.
The complaint claims that: “Subscribers now have to pay extra to get something they already paid for.”
Aside from being “unfair,” the lawsuit claims that Amazon gained an unfair advantage by falsely marketing Prime Video as “commercial-free” for years before introducing its ad-supported tier. The complaint claims that this “harms both consumers and honest competition.”
The Hollywood Reporter claims that for users who subscribed to Prime before December 28, 2023, the proposed class action seeks at least five million dollars as well as a court order prohibiting Amazon from engaging in any more allegedly deceptive behavior. In addition to other alleged infractions of consumer protection laws in California and Washington, it brings claims for breach of contract, deceptive advertising, and unfair competition.
Amazon was sued by the Federal Trade Commission last year for allegedly tricking customers into signing up for its Prime service and then making it difficult for them to cancel their subscriptions. The lawsuit claimed that Amazon allegedly coerces users into signing up for automatically renewing subscriptions by using a “manipulative” and “coercive” interface. Additionally, it claimed that a large number of subscribers only intended to sign up for the less expensive Prime Video option.
According to the FTC, Prime is regarded as a crucial component of Amazon’s retail dominance because it offers users benefits like access to Prime Video, which keeps them confined to the company’s marketplace.
In 2020, Amazon was also sued for deceptive advertising and unfair competition after claiming to have the right to stop providing customers with access to content they had paid for through Prime Video. In 2022, a federal judge dismissed the proposed class action, siding with Amazon on the grounds that its terms of use inform users that their purchased movies and TV shows might not be available at some point in the future due to provider licensing restrictions.