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Amazon has been hit with a class-action lawsuit from Prime subscribers who claim they were misled when they were charged extra fees to stream movies and TV shows without ads.
Amazon strikes lawsuit
The proposed class action lawsuit was filed in federal court in California on Friday, “alleging breach of contract and violations of state consumer protection laws on behalf of users who saw the terms of their subscriptions with Amazon change when it focused on making its ad tier the default tier for its more than 100 million subscribers,” According to The Hollywood Reporter.
Amazon announced plans in December last year to run ads for all Prime Video viewers, and rolled out the change last month, instantly becoming the largest ad-supported subscription streaming company.
Prime subscribers can pay an additional $2.99 per month to get back to watching content without ads.
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Details of the lawsuit
The issue at hand is that users who had previously signed up for annual subscriptions were also affected by an act they claim was deceptive on Amazon's part.
“For years, Amazon has advertised that its Prime subscription included ad-free streaming of movies and TV shows,” Forbes reported. “Like other consumers, Plaintiff purchased a Prime subscription, thinking it would include ad-free streaming of movies and TV shows. But no. Plaintiff brings this case for himself and other Amazon Prime members.
“Instead of getting a subscription that included ad-free streaming of TV shows and movies, they got something less valuable. They can't enjoy ad-free streaming unless they pay an additional $2.99 per month, the suit said, according to The Wrap.” Amazon's false advertising thus harms consumers by depriving them of the reasonable expectations to which they are entitled. Subscribers now have to pay extra to get something they already paid for.
The class action lawsuit seeks at least $5 million as well as a court order prohibiting Amazon from engaging in further deceptive conduct on behalf of users who signed up for Prime before December 28, 2023.
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Amazon Goals
Amazon CEO Andy Jassy spoke during the company's fourth-quarter earnings call to say that he believes Prime Video will become a “big, profitable company” thanks to this incremental change. He went on to express his plans to continue investing in “compelling and exclusive content” like “Thursday Night Football” and the Lord of the Rings.
“With the addition of ads on Prime Video, we will be able to continue to meaningfully invest in content over time,” he added.
USA Today reported that Amazon Prime Video sent an email to customers at the end of December notifying them of “an upcoming change to your Prime Video experience” before introducing “limited advertising” to allow the platform “to continue investing in compelling content and continuing to scale up.” This investment is over a long period of time.”
“We aim to have significantly less advertising than linear TV and other live TV providers,” the email continued. “There is no action required from you, and there is no change to the current price of your Prime membership.”
Amazon has not yet commented publicly on this lawsuit.
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