Amazon Subs Battle Prime Video Ads

Amazon Prime users are pressing to proceed with a lawsuit over the company's decision to charge annual subscribers extra fees to avoid ads in streaming videos.

In papers filed Monday with U.S. District Court Judge Barbara Rothstein in Seattle, the users restate their claim that Amazon violated its contract with them by charging an additional $2.99 a month fee for ad-free service after they had purchased year-long subscriptions for access to ad-free videos.

“Plaintiffs agreed to pay $139 for an annual Amazon Prime membership with commercial-free Prime Video service,” class counsel wrote. “Amazon breached that contract in January 2024, when ... it increased the cost of the annual subscription by requiring members to pay over 25% more per month to maintain commercial-free Prime Video -- even though consumers had already paid their annual subscription fee.”

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The motion comes in a battle dating to February, when California resident Wilbert Napoleon sued Amazon over its then-new decision to serve ads in videos, unless subscribers paid extra fees.

Amazon said in September 2023 that it planned to introduce ads in the movies and television shows streamed by Prime members, unless they paid an extra $2.99 a month. The company isn't inserting ads in videos that people purchase or rent.

Amazon rolled out the new ad tier in January.

Napoleon alleged his complaint that he renewed his annual subscription to Prime in June 2023 under the belief that the service would continue to offer ad-free streaming.

He pointed in the complaint to a February 2011 Amazon announcement introducing Prime video, which stated that Prime members would receive “unlimited, commercial-free streaming.”

“Based on Amazon’s advertisements, reasonable consumers who subscribed to Amazon Prime before the change reasonably expected that their Amazon Prime subscription would include ad-free streaming of movies and tv shows for the duration of the subscription,” he alleged.

Other Prime members joined his suit in September, claiming in an amended class-action complaint that Amazon broke its contract with subscribers and violated a Washington consumer protection law.

Last month, Amazon urged Rothstein to throw out the case, arguing that the Prime terms and conditions gave the company the right to change members' benefits.

“Amazon never guaranteed that any particular Prime benefit would remain available indefinitely,” the company argued in a written motion.

“Amazon never promised -- to Prime members or anyone else -- that Prime Video would be always, or entirely, ad-free,” Amazon wrote. “But because Amazon understood that some people would prefer not to see ads, Amazon offered an option for Prime Video users to watch ad-free content for $2.99/month.”

But the plaintiffs counter that the “Prime Video” terms -- which differ from the more general Amazon Prime terms -- provide that any increases in subscription fees won't apply until renewal.

“Amazon’s Prime terms explicitly incorporate its Video terms; its Video terms expressly prohibit fee hikes during a subscription term; yet Amazon did precisely that,” class counsel argues. “While Amazon was free to increase its pricing for monthly subscribers as it did, it cannot do the same for plaintiffs, who paid for a full year of ad-free Prime Video at a fixed price.”

Rothstein hasn't yet indicated when she will decide whether the case can move forward.

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