Amazon Faces Lawsuit Over Extra Charges for Ad-Free Streaming on Prime Video
Amazon is facing a lawsuit as its legal troubles escalate. The tech giant is being accused of deceiving its Prime members by imposing additional charges for ad-free streaming of movies and TV shows. The lawsuit, which was filed as a class action in a federal court in California, alleges that Amazon breached its contract and violated consumer protection laws.
According to the lawsuit, Amazon altered its subscription terms for over 100 million subscribers, making an ad-supported tier the standard offering. This move required users to pay an extra $2.99 per month to avoid ads. The change not only affected new subscribers but also those who had previously opted for annual subscriptions. Subscribers argue that the alteration was misleading, as they now have to pay extra for something they had already paid for.
The lawsuit further criticizes Amazon for profiting from advertising Prime Video as “commercial-free” before introducing the ad-supported version. The complaint claims that this action harms both consumers and competition, undermining consumer trust in the marketplace. The lawsuit aims to secure a minimum of $5 million in damages and seeks a judicial injunction to prevent Amazon from continuing its alleged deceptive practices.
This is not the first time Amazon has faced legal challenges. Last year, the Federal Trade Commission (FTC) initiated legal action against the company for misleading consumers into enrolling in its Prime service and making the cancellation process difficult. Additionally, Amazon has been accused of unfair competition and misleading advertising related to the potential termination of users’ access to content purchased via Prime Video.
The Amazon Prime lawsuit comes at a critical time for the tech giant. The FTC’s legal action, supported by attorneys general from 17 states, underscores the increasing scrutiny on Amazon’s dominance in the market. As the lawsuit progresses to trial, Amazon is preparing a robust defense to justify its practices. This legal battle highlights the growing concerns surrounding Amazon’s strategies and their impact on competition and consumer choice.
In response to the lawsuit, Amazon has refrained from commenting on the matter.
Analyst comment
Negative news. The market may have a negative reaction as the lawsuit raises concerns about Amazon’s business practices and consumer trust. There could be potential financial implications from damages awarded. The legal battle adds to the mounting scrutiny on Amazon’s dominance in the market.
