Amazon’s decision to introduce ads for subscribers to Amazon Prime Video’s “standard” subscription tier could end up costing it much more than it bargained for. The company is facing a class action lawsuit in Germany, with thousands of irate subscribers demanding compensation.
Like most of its rivals in the video streaming business, Amazon eagerly embraced ads in early 2024 after years of offering an entirely ad-free experience. But unlike Netflix, Disney+ and HBO Max, which all introduced new, lower-cost ad-supported subscription plans, Amazon did something different. Rather than creating a new tier, it simply added the ads to its existing standard plan in the U.S., U.K., Canada and Germany. Users were then asked to pay an extra fee to avoid seeing them.
Amazon may have thought it was being smarter than its rivals. By rolling out ads for all of its standard subscribers, it would be able to target millions of viewers from the very beginning, in contrast to Netflix etc., who would initially only have a very small market for their ads.
But Amazon should probably have thought twice about pulling off such a move in Germany, where lawmakers are known for being especially sympathetic towards consumer rights and have a long history of going after big tech companies. As FlatpanelsHD reported, it wasn't long before people began questioning whether or not Amazon’s move was legal, and ultimately a number of them decided it wasn’t. Henceforth, consumers began taking legal action against the company.
Fast-forward to December, and a Munich court ruled against Amazon, deciding that subscribers had the right to avoid seeing ads, as per the agreement they stuck with the company when they first signed up, VZBV reported.
More than 200,000 German Amazon Prime Video subscribers have joined the class action lawsuit, arguing that they’re entitled to be reimbursed to the tune of 2.99 euros for each month they’ve had to put up with viewing ads since they were first rolled out in early 2024. What that may not seem like very much, 4KFilme reports that it could ultimately cost Amazon more than 1.8 billion euros, as another lawsuit is also arguing that the company returns all of the profits it has made from the ads it has “illegally” served to consumers.
Amazon is appealing the verdict against it, and so it may yet find a way to escape that punishment, or at least minimise it somehow. But the case is likely to have implications as Amazon plans the rollout of ads in further European territories.
