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Federal Judge Dismisses Class Action Over Amazon Prime Video Ad Tier

The decision underscores that Amazon’s user agreement allows alterations to Prime Video’s benefits without constituting a price increase.

Media are seen in front of an Amazon Prime Video logo during an Amazon Prime Video India launch event in Mumbai, India, April 28, 2022. REUTERS/Francis Mascarenhas/ File Photo

Overview

  • Judge Barbara Rothstein ruled that adding commercials to Prime Video qualifies as a permitted benefit modification under Amazon’s subscription terms rather than a price hike.
  • The court pointed to contract provisions that reserve Amazon’s right to change or discontinue any part of its service without notice.
  • Last year, Amazon made the ad-supported tier the default for over 100 million Prime members, charging $2.99 per month for an ad-free option.
  • Consumers had alleged breach of contract and deceptive “bait-and-switch” practices by accusing Amazon of imposing a hidden fee for ad-free viewing.
  • The decision comes as streaming platforms face growing legal scrutiny of subscription and cancellation practices, exemplified by NBCUniversal’s $3.6 million Peacock settlement.