Amazon Prime Video Ad Tier Controversy: Class Action Lawsuit Filed, Amazon Seeks Dismissal

If you're one of the millions of Amazon Prime subscribers, you might have noticed a change in your viewing experience lately. 

In a move that's sparked controversy and legal action, Amazon introduced ads to its Prime Video service, previously touted as an ad-free benefit of Prime membership. 

Now, the tech giant is facing a class action lawsuit alleging false advertising and deceptive practices – but Amazon is fighting back, seeking to dismiss the case by citing its user agreement. 

Let's examine the details of this high-stakes legal battle.

Understanding Amazon Prime and Prime Video

Amazon Prime is a paid subscription service that offers a variety of perks to its members, including free shipping, exclusive deals, and – perhaps most notably – access to Prime Video. 

Prime Video is Amazon's streaming platform, boasting a vast library of movies, TV shows, and original content. 

Until recently, one of the key selling points of Prime Video was its ad-free viewing experience, setting it apart from competitors like Hulu and YouTube.

What You Need to Know About the Class Action 

In February 2024, a group of disgruntled Prime Video users filed a class action against Amazon, alleging that the company engaged in false advertising when it introduced ads to the platform. 

Breach of contract allegations 

The plaintiffs claim that the company misrepresented the ad-free nature of Prime Video and that Amazon's decision to start showing ads constitutes a breach of contract.

Lawsuit details 

• Filed by Prime Video users who subscribed to the service before December 28, 2023.
• Plaintiffs seek over $5 million in damages.
• Covers all Prime subscribers who signed up before Amazon introduced ads.

Legal counsel for the plaintiffs contends that Amazon's promise of ad-free content was a significant factor in many users' decision to subscribe to Prime and that the company's about-face on this issue is a violation of trust and promises made.

Current Ad Change Policy 

In December 2023, the company announced it would show ads to Prime Video subscribers by default. 

Ad-free Prime Video costs more

To maintain an ad-free experience, users pay an additional $2.99 monthly on top of their existing Prime subscription fee.

Social media backlash 

Prime members met Amazon's move with swift backlash, and many took to social media to express their frustration and disappointment.

At the heart of this controversy is the question of whether Amazon's decision to introduce ads aligns with the original promises and terms of the Prime Video service.

Fraudulent representation 

Some users even threatened to cancel their subscriptions altogether, arguing that Amazon had pulled a "bait and switch" by luring them in with the promise of ad-free content only to renege on that commitment later.

While Amazon maintains that it has the right to modify its offerings, many subscribers feel that the company has broken its end of the bargain.

Amazon's Motion to Dismiss: Relying on the Fine Print

In response to the class action lawsuit, Amazon filed a motion to dismiss the case in October 2024. 

Primary argument

Amazon claims the plaintiffs agreed to the terms and conditions of Prime membership, which explicitly state that Amazon reserves the right to "add or remove Prime membership benefits" at its discretion.

Motion to dismiss key points

• Under Prime Terms and Conditions, all subscribers agree when signing up to allow Amazon to modify the membership benefits.
• Defendant claims that it never guaranteed Prime Video would be ad-free indefinitely.
• Argues that these terms bind the plaintiffs and that they "got exactly what they bargained for" when they subscribed to Prime.

In essence, Amazon is saying that the plaintiffs have no legal leg to stand on (standing) because they agreed to the possibility of changes to Prime benefits when they signed up. 

The company maintains that it was within its rights to introduce ads to Prime Video and that users who object to this change are simply out of luck.

Terms and Promises of Prime Video

At the center of this legal dispute is the language of Amazon's Prime Video Terms of Service agreement (ToS) and the expectations created for subscribers.

Implied promises

While Amazon points to the fine print allowing it to make changes to the service, the plaintiffs argue that the company's marketing and public statements created an implied promise of ad-free content that supersedes the legalese of the user agreement.

Vague ToS language 

There's also the question of how clearly Amazon communicated its terms to subscribers. 

• Were subscribers fully aware that Amazon could change the ad-free nature of Prime Video at any time?
• Did the company downplay this possibility in its advertising and promotional materials?

Separate contracts 

Another wrinkle in this debate is the existence of a standalone Prime Video subscription, separate from the broader Prime membership. 

Some have argued that the terms allowing changes to Prime benefits shouldn't apply to those who only signed up for Prime Video, as they weren't receiving the full suite of Prime perks in the first place.

What's Next for the Prime Video Lawsuit?

On October 3, 2024, class plaintiff Johnson submitted multiple discovery requests to Amazon, compelling all Amazon Prime Video class action lawsuit parties to file a joint stipulation to stay proceedings and establish new deadlines.

Deadline established 

Under the California Civil Code, Amazon has until the end of  November 2024 to respond to Johnson's latest data request. 

However, the court recognized that the defendant’s answers could affect the plaintiffs' complaints and allegations, potentially requiring further amendments to their legal claims.

Amendments allowed

When approving the stipulation, the court allowed plaintiffs until December 9, 2024, to modify their complaint based on any new information received from Amazon's response to Johnson's data request. 

The plaintiffs may also choose to keep their Second Amended Complaint as the operative action.

Briefing calendar set

The court order also established a new briefing schedule, as follows:

• Amazon's final response due by January 17, 2025.
• Plaintiffs' opposition due by February 14, 2025.
• Amazon's final reply is due by February 28, 2025.

Finally, both parties agreed that the modified calendar would help streamline the legal issues in the case significantly.​​​​​​​​​​​​​​​​

Final Thoughts on Video Ad Tiering

Ultimately, the Prime Video lawsuit is a test case for the delicate balance streaming services must strike between user experience and their business interests.

Whether it's the introduction of ads, the cancellation of beloved shows, or changes to subscription pricing, consumers and potential litigants alike will most likely scrutinize these service moves in the future.

While companies like Amazon have the right to modify their offerings and explore new revenue streams, they are also responsible for being transparent with their subscribers and avoiding misleading marketing practices.