Australia competition regulator sues Amazon over alleged Prime subscription terms that require payment to avoid ads

Australia’s competition regulator has taken Amazon to court over alleged unfair terms in Amazon Prime subscription contracts, according to a report published June 30, 2026. The regulator alleges that Prime subscribers were required to pay an extra AU$2.99 to avoid advertising, and that Amazon did not provide an option for refunds connected to those advertising terms.

The dispute centers on how the contracts were structured for Australian consumers, the report said. Under the regulator’s theory, the Prime arrangement did not offer a way for subscribers to opt out of ads without paying the additional AU$2.99 fee, and the regulator alleges that contract design left consumers without a refund mechanism if they were dissatisfied with the advertising terms.

The complaint also raises the question of whether the advertising and pricing structure was clear and fair under Australia’s consumer and competition rules. The regulator’s move indicates an attempt to use the legal process to address alleged conduct through court proceedings rather than voluntary changes alone.

Amazon, according to the report, is facing the regulator’s claims in the litigation that has been filed. The report does not describe the regulator’s full legal allegations or the specific remedies being sought, and the details of any court filings were not provided in the available summary.

The case has immediate relevance for the millions of Australians who use Prime subscriptions to access shopping, streaming, and other services bundled under the Prime brand. If the regulator’s allegations are upheld, it could affect how subscription contracts are drafted, how optional add-ons are priced, and what refund rights are offered when services are contingent on advertising.

Regulators typically focus not only on whether consumers received the product they expected, but also whether contract terms and disclosures create imbalance or foreclose practical alternatives. In this case, the core issues described involve the extra payment to avoid ads and the absence of a refund option, which the regulator says were built into the contract.

As the litigation proceeds, the next steps will depend on how the court addresses the regulator’s claims and any defenses raised by Amazon, including whether the ad-free option and refund policies complied with applicable Australian law and contract fairness standards.