With roughly 167 million US users, Amazon Prime Video stands as one of the most popular streaming services in the country. However, despite the widespread use of the platform and Amazon itself being a large and profitable business, the brand is no stranger to legal scrutiny. In fact, Amazon Prime Video recently found itself at the center of two significant class action lawsuits.
These suits highlight critical consumer protection issues, and they could have far-reaching implications for Prime members going forward. With that in mind, below is everything you need to know about the Amazon Prime Video class action lawsuit, including how to join them yourself.
The Amazon Prime Video Ad-Tier Controversy
Amazon Prime subscriptions have included access to Prime Video for years. And for just as long, members have enjoyed an ad-free streaming experience. However, Amazon changed all that in 2024 by splitting Prime Video content subscriptions into two separate tiers.
Today, members who only have a standard Prime subscription will have to watch Prime Video ads before and in the middle of their content. And in order to access a commercial-free service, members will have to pay an extra $2.99 per month. The new charge applies not only to Amazon’s own exclusive content but also to any featured video available through Prime Video.
Even though Prime Video’s ad-free version is much cheaper than that of many other providers, the company surprised its users with the change.
Many members, prior to learning about the new tier-based format, had already renewed their annual Amazon Prime subscriptions, believing they would continue to receive the same ad-free streaming benefits given their pre-existing loyalty. But alas, virtually everyone was affected by the sudden shift in subscription benefits.
Details of the Amazon Prime Ad-Tier Class Action Lawsuit
The controversy that has surrounded Prime Video’s subscription tiers has since led to a class action lawsuit being filed in a California federal court. The plaintiffs’ arguments focus on the impact of the introduction of ads and an additional fee for ad-free viewing, highlighting consumers who feel as though they were misled about the terms of their subscription and are facing unexpected costs as a result.
Furthermore, the plaintiffs claim that Amazon’s actions not only violate its existing contracts with subscribers but also general consumer protection laws. It is argued that Amazon engaged in false advertising and unfair competition by changing the terms of service for subscribers who had already committed to an annual plan.
The lawsuit seeks class-action status and a minimum of $5 million in damages. Individuals who subscribed to Prime before December 28, 2023, are included in the suit.
Amazon’s Response and Legal Position
Amazon’s public response to the lawsuit has been to defend its decision, and it is moving to have the suit dismissed.
Each year, Amazon releases a publicly available letter to its shareholders. The 2023 letter was written by CEO Andy Jassy, who spoke extensively about the organization’s commitment to making investment decisions based on “long-term market leadership considerations” while shifting attention away from “short-term profitability considerations.” Jassy also discussed his confidence in the value of exclusive content like Lord of the Rings, Reacher, Road House, and original stories.
With that in mind, it appears that moving forward, Amazon will continue to fight the lawsuit while investing heavily in exclusive video assets that continue to draw in new consumers.
Financial Implications for Amazon
Far too often, class action lawsuits against major corporations seem like a slap on the wrist. Even if consumers recover the $5 million they are requesting, the fine will be nothing more than a drop in the bucket for such a massive conglomerate as Amazon, something they’d make back in no time at all. In fact, experts predict that the addition of ads to Prime Video could add $3 billion to the company’s revenue this year alone.
Those figures are based on Amazon’s current advertising strategy, which plays about three minutes of ads per 60 minutes of content. If the company were to increase ad plays to six minutes per hour, revenue could potentially shoot to $7.1 billion by 2026.
Amazon is also reinvesting a large portion of its Prime Video revenue into content. In 2023, the company spent $18.9 billion on music and video content, marking a 14% rise from the year prior. That’s in spite of the fact that many of the most popular streamed shows are older, but regardless of such, the bottom line is that the lawsuit will barely dent the brand’s revenue.
Be that as it may, it’s still important for consumers to hold major organizations accountable for the promises they make (and break).
The Video Privacy Protection Act (VPPA) Lawsuit
In addition to the ad-tier lawsuit, Amazon faces a second class action lawsuit alleging violations of the Video Privacy Protection Act (VPPA), which requires companies to obtain explicit consent from consumers before sharing their viewing data.
The proposed class action lawsuit claims that Amazon violated these requirements by illegally sharing detailed subscriber information, including viewing behaviors and billing info, with third parties. If true, these acts raise serious concerns and questions about how streaming services handle and protect user data.
The VPPA plaintiffs have not yet established a window for the alleged offenses, as it’s unclear how long Amazon has allegedly been illegally sharing subscriber data. Nevertheless, the plaintiffs filed the suit in a Washington federal court, and predictably, in Summer, 2024 Amazon asked the judge to dismiss the claim. No ruling has been made yet.
If the courts allow the claim to continue, the plaintiffs will have to establish a time frame for the offense. If you were a Prime Video user during that window, you may be eligible to participate in the class action suit.
Consumer Rights and Privacy Concerns
Amazon’s actions underscore broader issues regarding privacy expectations in the digital age. It can be tough to understand and control how your data is being collected and shared by the entities from which you make purchases. Still, these legal challenges could prompt changes in how streaming services operate and handle user data. And those changes could potentially lead to improved privacy protections for consumers.
As such, subscribers must be aware of their rights and advocate for greater control over their personal information.
How to Get Involved in the Class Actions
If you had an active Amazon Prime Video subscription prior to December 28, 2023, you may be able to join the ad-tier lawsuit. Typically, a judge will order the creation of a dedicated website to join the suit if the plaintiffs establish standing. The case is still in its very early stages, so no such website exists yet. And the VPPA lawsuit is even more recent.
It’s important to frequently check the status of these cases. Look out for news releases and updates so that you can check eligibility and join one or both of the suits, if applicable.
Other Relevant Class Action Lawsuits
As alluded to earlier, Amazon has faced numerous suits over the years, with allegations including everything from unfair competition to abuse of consumer data. Amazon was even caught spying on eBay and Walmart to gather intelligence on their ecommerce platforms.
The Federal Trade Commission (FTC) has also launched an inquiry into Amazon, as well as OpenAI, Microsoft, and Google, scrutinizing certain partnerships and investments. It has even taken several shots at Amazon alone, too, including an antitrust challenge, which is still ongoing.
Here’s a closer look at the growing list of class action lawsuits against Amazon and other major brands:
Amazon Video Ownership Scandal
In 2020, consumers filed a class action suit against Amazon for misleading practices about media content purchases. Users were frustrated that they were allowed to “purchase” movies and shows on Amazon but that those titles could be removed from the platform at a later date.
Ultimately, a California federal court dismissed the case, stating that the plaintiffs lacked standing. However, the introduction of the case was a move that has since seemed to have brought Prime Video under closer scrutiny and resulted in some negative press for the streaming platform.
Shrinking Crocs
If you’ve ever slipped on your favorite pair of Crocs and could swear that they’ve shrunk, chances are that they, in fact, probably did. Consumers filed a class action lawsuit against the shoe brand, making allegations of false advertising and misleading business practices. They not only claim that the shoes shrink in water and after exposure to normal heat and sunlight but that Crocs itself knew about the problem and did nothing to fix it.
The suit is still ongoing, meaning it’s not too late to join. If you’ve owned a pair of Crocs and had them shrink, you may be eligible for compensation.
Walmart’s Pricing Inconsistencies
Walmart has been drawing the ire of consumers with its inconsistent grocery prices. Plaintiffs discovered that weighted goods like pork and meat were being sold at prices higher than what was being advertised. Various bagged citrus products weighed less than advertised as well, causing customers to overpay.
Ultimately, Walmart agreed to a $45 million settlement. The filing period is already closed, so it’s unfortunately too late to join this particular suit.
Capital One’s Overdraft Fee Scandal
In 2023, plaintiffs filed a class action lawsuit against Capital One for questionable overdraft fees charged in ACH and check transactions. Members of the suit alleged that the company charged unfair insufficient funds and overdraft fees. The company failed to reimburse members for unjustly charged fees.
Capital One agreed to a $16 million payout. But like the Walmart case, it’s too late to file, as the claims period ended in early July 2024.
Facebook’s Data Privacy Violations
Facebook agreed to a monumental $725 million class-action settlement for violating the privacy of its users. The scandal dates back to 2018, when a Facebook app developer helped Cambridge Analytica access the personally identifiable data of approximately 87 million Facebook users.
Despite the years since then, there’s still time to file if you were affected by the incident, as objectors filed appeals in mid-2024 that probably won’t happen until early to mid-2025.
The Future of Streaming and Consumer Protection
The outcomes of the current lawsuits against Amazon could significantly impact the streaming industry. If the plaintiffs succeed, platforms like Prime Video may have to provide more notice about proposed pricing changes to avoid violating false advertising laws.
The lawsuit regarding Amazon’s data collection practices has even bigger implications for the streaming sector. Among other things, plaintiffs have alleged that Amazon did not give them the opportunity to opt out of data collection. Prime Video and other platforms that gather consumer data will, therefore, have to be more diligent about requesting permission from users and providing clear opportunities to opt-out.
What’s Next in the Amazon Class Action Lawsuits?
Both suits being brought against Amazon are still in their early stages. If the respective federal judges determine that plaintiffs have grounds to file the suits, they will enter the pre-trial stages. Amazon still has the opportunity to settle one or both of the claims.
If you think you may be eligible to participate in either suit, pay close attention to the latest developments and file a claim as soon as the opportunity arises. If you miss the filing window, you will be unable to participate in any compensation agreement.