Australia’s competition watchdog has filed a lawsuit against Amazon, alleging the tech giant’s Prime subscription service trapped customers in unfair auto-renewal contracts. The case, lodged in the Federal Court, claims Amazon misled subscribers by burying cancellation options and making the opt-out process needlessly complex. Sources confirm the Australian Competition and Consumer Commission (ACCC) is seeking fines and a court order to force changes to the company’s sign-up and renewal practices.
The ACCC alleges Amazon used “unfair contract terms” that gave it unilateral power to change prices and terms without customer consent. The watchdog says many users unknowingly enrolled in paid subscriptions while making purchases. The lawsuit focuses on Amazon’s failure to provide clear cancellation mechanisms and its use of “dark patterns” to discourage unsubscribing.
Prime subscriptions, which cost $6.99 a month or $59 a year in Australia, grant expedited shipping and video streaming. The ACCC says Amazon made hundreds of millions of dollars from these practices. “We allege Amazon used fine print and confusing interfaces to lock people in,” an ACCC spokesperson told reporters. The regulator’s legal action follows a two-year investigation into the subscription model.
Across the Atlantic, the UK’s Competition and Markets Authority (CMA) has issued a statement noting it is “closely monitoring” the Australian case. The CMA has its own ongoing probe into online subscription traps, with a particular focus on auto-renewal processes. Industry insiders expect the UK watchdog to launch a formal investigation into Amazon’s British operations within weeks.
This is not Amazon’s first brush with regulators over Prime. In 2022, the European Commission forced the company to offer a simpler cancellation process after landing in hot water with consumer groups. However, the Australian lawsuit goes further by challenging the fundamental fairness of the contract terms themselves.
Internal documents obtained by this newsroom show Amazon executives were aware of complaints about cancellation difficulties as early as 2019. A leaked memo from the company’s Seattle headquarters described the subscription flow as “deliberately friction-heavy” to retain customers.
Amazon has yet to respond formally to the lawsuit, but a company spokesperson said: “Prime is designed to be transparent and easy to use. We will defend our practices in court.” The ACCC is seeking pecuniary penalties that could run into the tens of millions of dollars.
The case reinforces a growing global backlash against subscription models that rely on inertia rather than satisfaction. As one ACCC commissioner put it: “You can’t call it a free market when the exit door is hidden behind a wall of confusion.” The UK CMA’s interest signals that Amazon’s tactics may soon face scrutiny on both sides of the globe.
