Amazon is fighting back against a lawsuit that claims it misled Prime members by charging them extra to stream movies and TV shows without ads.
The company claims it had previously disclosed that the set of Prime benefits could change in order to dismiss the proposed class action lawsuit. It states that it is in no way guaranteed that the package’s “particular” benefits will “be available indefinitely.”
“Amazon has never promised Prime members or anyone else that they will always or completely be free of advertising from Prime Video,” Friday’s filing said.
Prime is a key element to Amazon’s retail dominance, the Federal Trade Commission argues, because it locks users into the company’s market by offering perks like access to Prime Video. Streaming services don’t have to be a revenue-generating arm of your business. It just needs to be part of a profitable ecosystem of services.
Last year, Amazon pivoted to making the ad tier the default for its more than 100 million subscribers, quickly making the service a streaming ad juggernaut and the largest ad-supported subscription streamer. It became. To watch without ads, users must pay an additional $2.99 per month.
The move prompted lawsuits from users who signed up for annual subscriptions. They alleged breach of contract and violation of state consumer protection laws for an alleged “bait and switch.”
In its motion to dismiss the lawsuit, Amazon points to a provision that says it “may choose to add or remove Prime membership benefits in its sole discretion.” The newspaper cited an order issued by a federal judge in a separate case in which the e-commerce giant paid a hidden $9.95 shipping fee on some purchases from Whole Foods in July. The company filed a similar class action lawsuit alleging that it misled consumers about Prime benefits. These subscribers claimed they relied on advertising for “free” and “fast” delivery.
Even if Prime Video is advertised as ad-free, the company is “free to change or remove that feature at any time in its discretion,” the company said. “Otherwise, you’re depriving Amazon of bargains.”
The lawsuit also pointed to language in Amazon Prime Video’s terms that says “subscription price increases will not apply” until the plan is renewed. In response, the company said this provision only applies to Prime Video subscribers as a standalone service separate from Prime.
The proposed class action lawsuit seeks at least $5 million and a court order prohibiting the owners of Amazon MGM Studios from engaging in further deceptive practices on behalf of users who joined Prime before December 28, 2023. I’m looking for it. Breach of contract and filing false claims. The company is accused of violating consumer protection laws in California and Washington, including advertising and unfair competition.
Amazon Prime is under intense scrutiny from lawmakers. Last year, the FTC sued the tech giant for allegedly deceiving consumers into signing up for Prime service and then preventing them from canceling their subscriptions. The complaint alleges that Amazon employs a “manipulative” and “coercive” interface to trick users into signing up for auto-renewing subscriptions. It also claims that many subscribers only intended to sign up for the lower-cost Prime Video.
Additionally, Amazon was sued in 2020 for unfair competition and false advertising over the company’s reservation of the right to terminate consumers’ access to content purchased through Prime Video. In 2022, a federal judge sided with Amazon and dismissed a proposed class action lawsuit that said its terms of service provided that movies and TV shows users purchased may be unavailable due to the provider’s licensing restrictions. did.
