Amazon Faces Lawsuit Over Addition of Ads to Prime Video Platform
Amazon, the e-commerce giant, is currently embroiled in a lawsuit filed by disgruntled Prime Video customers following the introduction of ads on the platform. The recent move has resulted in accusations of breach of contract and violation of state consumer protection laws.
Streaming services such as Amazon Prime Video, Netflix, and Disney Plus have been tightening their policies in an effort to curb payment plan evasion and password sharing. This has made it increasingly difficult for their subscribers to exploit loopholes and avoid paying a fair price for their services.
Prime Video, in particular, has come under fire for its recent decision to introduce ads. In the past, the service has prided itself on being “commercial-free,” causing controversy when it suddenly announced the implementation of ads in late 2023.
As a solution, Prime Video offered its subscribers the option to pay an additional $2.99 per month to skip these ads. However, many customers feel deceived and believe that their subscription terms have been changed without their consent.
The class action lawsuit, filed on behalf of users, seeks to hold Amazon accountable for its actions. It alleges a breach of contract and violation of state consumer protection laws, claiming that over 100 million subscribers had their default settings switched to the ad-inclusive tier without their agreement. This means that many users are now being charged extra on top of their existing agreed-upon subscription price, including those who pay annually.
The lawsuit is demanding a minimum of $5 million in damages and requesting that Amazon be restricted from making further changes for users who subscribed before December 28, 2023.
While the outcome of the lawsuit remains uncertain, it serves as a potential warning to other major streaming platforms. Prime Video subscribers have made their discontent clear and are determined to hold Amazon accountable for the sudden cost increase. It serves as a lesson to streaming giants like Netflix and Disney Plus to be cautious in their future policy changes.
Analyst comment
Neutral news.
As an analyst, it is likely that the market for streaming platforms, including Amazon Prime Video, may experience some turbulence in the short term. The introduction of ads and the resulting lawsuit could potentially lead to a loss of subscribers and a decrease in revenue. Other streaming platforms may also face increased scrutiny and may need to carefully consider any policy changes to avoid similar backlash.
