Subscribers File a $5 Million Class Action Lawsuit in California Federal Court Against Amazon for enabling Ads on the streaming service and for charging an additional fee for an ad-free experience.
Amazon is facing a lawsuit alleging that it deceived its Prime subscribers by imposing an additional fee for an ad-free content-watching experience on its platform.
Last Friday, a legal suit was filed in California Federal Court, claiming accusations of contract breach and violations of state consumer protection law. This suit represents individuals who noticed a change in Amazon’s subscription terms when it shifted over 100 million subscribers to an ad-supported plan by default.
In 2023, Amazon announced its plan to enable ads on its streaming platform, which it rolled out to its Prime user base this January. It also provided an option for subscribers to pay an additional fee of $2.99 monthly for the ad-free experience.
The Annual Subscribers remarked this move was misleading and remarked “Subscribers must now pay extra to get something they already paid for.”
Besides being unfair, Amazon was criticized for wrongly advertising Prime Video as “commercial-free” for years before introducing its ad-supported tier and benefited from it.
The proposed class action lawsuit seeks a remedy of at least $5 million and a judicial directive to prevent Amazon from continuing such misleading practices. It confines claims of false advertising, contract breach, and unfair competition, among other alleged violations of consumer protection statutes in California and Washington.
In a related development, the Federal Trade Commission initiated legal action against Amazon last year, accusing it of misleading consumers into enrolling in its Prime service and obstructing them from cancelling their subscriptions.
The lawsuit claims that Amazon has implemented a “manipulative” and “coercive” user interface to entrap users and make it difficult for them to proceed with cancellation, thus pushing them to renew their subscriptions automatically. It further alleges that many subscribers intended to opt solely for Prime Video, a more affordable choice.
The FTC highlights Prime’s importance in Amazon’s dominance in retail. Prime draws users to remain within the Amazon ecosystem by offering various benefits, including access to Prime Video.
Previously, in 2020, Amazon was sued for unfair competition and misleading advertising related to its policy of preventing users’ access to content purchased through Prime Video.
However, in 2022, the lawsuit was dismissed by a federal judge, taking a stand with Amazon’s claim that, as per the policy it has stated that the purchased content may become unavailable time due to the licensing agreements with content providers.
Ragul Thangavel
With over nine years of diverse professional experience, Ragul has made significant contributions across various domains, including Media Operations, OTT Technologies, Video Production, Ecommerce, and Social Media.
Holding an Engineering degree, Ragul's career took an unconventional turn when he discovered his passion for writing, leading him to begin his journey as a content writer.
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