Amazon has found itself in hot water after being accused of deceiving Prime Video subscribers who found themselves needing to pay more to remove adverts.
The lawsuit, filed in California federal court on Friday, alleges breach of contract and violations of state consumer protection laws on behalf of users affected by changes to their Amazon subscriptions.
These changes occurred when the company shifted its default setting to include ads for its over 100 million subscribers.
Back in 2023, Amazon announced its intention to introduce ads for all Prime Video viewers. Last month, the platform implemented this change, transforming the service into one that streams ads and becoming the largest ad-supported subscription streamer.
However, users are now required to pay an additional $2.99 per month to enjoy ad-free content.
Critics argue that this alteration impacted users who had previously signed up for annual subscriptions, labeling the change as deceptive. "Subscribers must now pay extra to get something they already paid for," the complaint states, per the Hollywood Reporter.
The lawsuit further alleges that Amazon benefitted unfairly by promoting Prime Video as "commercial-free" for years before introducing its ad-supported tier, thereby harming consumers and distorting fair competition.
Seeking at least $5 million in damages, the proposed class action aims to prevent Amazon from engaging in further practices on behalf of users who subscribed to Prime before December 28, 2023.
It encompasses claims for breach of contract, false advertising, and unfair competition, citing violations of consumer protection laws in California and Washington.
This legal battle isn't Amazon's first encounter with allegations of deceptive practices. Last year, the tech giant faced a lawsuit from the Federal Trade Commission (FTC) for allegedly misleading consumers into subscribing to Prime and making it difficult for them to cancel their subscriptions.
The FTC argued that Amazon employed manipulative tactics to enroll users in automatically renewing subscriptions, despite many subscribers intending to sign up solely for Prime Video.
Prime is integral to Amazon's dominance in the retail sector, as it keeps users tied to the company's ecosystem by offering various perks, including access to Prime Video, according to the FTC.
Additionally, Amazon was previously sued in 2020 for unfair competition and false advertising regarding its ability to revoke consumers' access to content purchased through Prime Video.
However, a federal judge dismissed the proposed class action in 2022, siding with Amazon on the basis of its terms of use, which indicate that content availability may be subject to licensing restrictions.
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