### Amazon Battles Allegations of Misleading Prime Subscribers Over Ad-Free Content

Amazon is vigorously contesting a lawsuit that accuses it of misleading Prime subscribers by introducing an additional fee for ad-free streaming of movies and TV shows. The company moved to dismiss the proposed class action, emphasizing that it always disclosed the possibility of changes to the Prime benefits bundle. Amazon maintains that it "never guaranteed that any particular" perk, including ad-free streaming, would "remain available indefinitely." According to the company's Friday filing, "Amazon never promised — to Prime members or anyone else — that Prime Video would be always, or entirely, ad-free."

The Federal Trade Commission (FTC) has alleged that Prime plays a crucial role in Amazon's dominance in the retail space by locking users into its marketplace through various perks, including Prime Video. While it does not necessarily need to be a highly profitable segment, Prime Video contributes to a broader, profitable ecosystem of services. Last year, Amazon made its ad-supported tier the default for over 100 million subscribers, quickly making the service a giant in the streaming-ad space. Users now have to pay an extra $2.99 per month to avoid ads.

This shift prompted a lawsuit from subscribers who had signed up for annual memberships. These users claimed the move constituted a breach of contract and violated state consumer protection laws, alleging a "bait and switch" tactic. In its defense, Amazon highlights its terms, which allow the company to "add or remove Prime membership benefits" at its sole discretion. The company pointed to a federal judge's decision in July to dismiss a similar class action involving alleged hidden delivery fees for Whole Foods purchases, which were advertised as "free" and "rapid."

Amazon argues that, even if it had touted Prime Video as ad-free, it retains the right to modify or eliminate that feature at any time. To decide otherwise, the company asserts, would deny it the benefit of its bargain. The lawsuit also cites language in the Prime Video terms indicating that any increase in subscription fees would not apply until the plan renewal. Amazon clarifies that this provision only pertains to standalone Prime Video subscribers, distinguishing it from the broader Prime membership.

The proposed class action seeks at least $5 million in damages and a court order to prevent Amazon from continuing such allegedly deceptive practices. It includes claims for breach of contract, false advertising, and unfair competition based on consumer protection laws in California and Washington. Prime has also drawn legal scrutiny from lawmakers. Last year, the FTC sued Amazon for allegedly tricking customers into signing up for Prime and complicating the cancellation process. The suit claimed Amazon uses a "manipulative" interface to automatically enroll users in renewing subscriptions.

Additionally, Amazon faced a 2020 lawsuit alleging unfair competition and false advertising concerning the termination of access to purchased content on Prime Video. A federal judge dismissed the class action in 2022, agreeing with Amazon that its terms of use indicate that movies and TV shows could become unavailable due to licensing restrictions from content providers.