When Netflix launched its ad-supported tier in November 2022, it tried to tempt viewers in with discounted rates, hoping to win new consumers and sell their eyeballs to ad-slingers. But Amazon Prime, well, it went a different route.
Amazon simply shot over an email in December 2023, giving subscribers a heads-up that it would start showing ads on Prime Video early this year, and explained going "ad-free" would cost Prime members an additional $2.99 a month (or £2.99 in the UK). But a lawsuit [PDF] filed this week claims that move was "deceptive, unfair" and contrary to "plaintiff and class members' reasonable expectations."
According to the would-be class action suit, filed by Californian Amazon Prime subscriber Wilbert Napoleon in Washington State earlier this week, he and fellow media streaming fans were asked to "pay extra to get something they already paid for" to prevent the addition of ads. The suit alleges breach of contract and various consumer protection laws. It also contends the move "harms both consumers and honest competition," coming after Prime for years promoted itself as a "commercial-free" service.
The proposed class would include the subset of folks in the United States who bought an annual Prime subscription before December 28, 2023.
The case states:
To stream movies and tv shows without ads, Amazon customers must now pay an additional $2.99 per month. This is true even for people who purchased the yearly, ad-free subscription, and who are now mid-way through their subscription. This is not fair, because these subscribers already paid for the ad-free version; these subscribers should not have to pay an additional $2.99/month for something that they already paid for.
According to Amazon's Prime Ts & Cs, it can make "changes to the membership fee" at its own "reasonable discretion and according to materially justified as well as objective criteria," and customers with an annual Amazon Prime membership can "switch to a monthly Amazon Prime membership anytime."
Netflix, by the way, will get rid of its cheapest ad-free tier - costing $11.99 a month - from Q2 this year, it said in a January earnings call [PDF].
Gregory K Peters, its co-CEO, told investors in response to a question that it did consider "making the ad tier the default option similar to Amazon."
"But given our long history of not having ads, we thought it was better for our members rather than force them into a change and give them ads."
Netflix's $15.49 per month option is currently its cheapest ad-free plan if you're a new subscriber, with ad-supported coming in at $6.99 in the US, €4.99 in the EU, and £4.99 in the UK.
A previous lawsuit filed against Amazon in 2022 covered similar ground, claiming the retail giant promised Prime free delivery from Whole Foods after it acquired the company, but later, in 2021, charged a $9.95 delivery fee. Amazon recently filed a motion to dismiss [PDF] the suit saying the Prime Terms give Amazon the "sole discretion" to add or remove Prime benefits, with the court previously agreeing Amazon "had contractual authority to suspend"... "any benefits of Prime membership, including free delivery and two-hour delivery." ®
Source: The register