Amazon Prime Video Ad Tier Class Action Lawsuit Dismissed

by

The court has discarded a claim that alleged Amazon was deceiving Prime members by charging extra for ad-free movie and TV show streaming.

On a recent court decision, Judge Barbara Rothstein stated that Amazon had made clear in the past that the perks included in their Prime membership could be altered. She emphasized that Amazon did not guarantee to its subscribers that the service would always be free of advertisements.

Rothstein pointed out that both Prime Terms and Video Terms regularly grant Amazon the ability to adjust, include new, or eliminate perks tied to memberships.”

Or more informally:

“Rothstein noted that Amazon can change, add, or take away benefits for their membership programs according to both the Prime Terms and Video Terms.

In the previous year, Amazon changed its strategy by setting its ad tier as the standard for over 100 million of its subscribers. This move instantly transformed the service into a dominant force in streaming ads and the largest ad-supported subscription streamer available. Users needed to pay an extra $2.99 per month if they wished to watch content without advertisements.

The action initiated by the move provoked a proposed collective lawsuit from those who subscribed annually. They asserted that there was a breach of contract and infringements on state consumer protection regulations, alleging a deceptive business practice often referred to as “bait and switch.

In the ruling made on Friday, the court highlighted that the company’s terms clearly give Amazon the power to decide at their own discretion whether to add or eliminate Prime membership perks. Furthermore, they have the authority to terminate certain services without prior notification at any given moment.

In their argument, lawyers for the subscribers contended that Amazon changing the ad-tier as the default amounted to a price hike not covered by the company’s terms and conditions. However, the court countered this viewpoint, asserting that when subscribers signed up for Prime, they were buying access to the service rather than an ad-free version specifically.

The court’s statement indicates that Amazon charging more from Prime members who want ad-free streaming can be seen as similar to a price hike for their wallets. However, it’s important to note that the court wants to keep separate the idea of removing benefits (like ads) and actually increasing prices.

From my perspective as a devoted Amazon Prime member, I’ve noticed that Rothstein’s findings highlight a consistent pattern in Amazon’s terms, which provide the flexibility to tweak and even eliminate benefits. Interestingly enough, the addition of ads on Prime Video didn’t lead to any extra costs for us subscribers, not a single penny more. The subscription fee for those who chose not to act remained unchanged.

The court stated that only the subscribers who willingly elected to pay extra for an ad-free service are the ones who encountered a price rise.

In the decision, the court granted the legal representatives of the subscribers a chance to amend their arguments in the lawsuit. This follows a federal judge dismissing a class action suit last year that accused Amazon of deceiving consumers regarding Prime benefits by charging an undisclosed $9.95 delivery fee on certain Whole Foods purchases. The subscribers, who believed they were receiving “free” delivery based on advertisements, made this claim as well.

Read More

2025-02-07 23:55