Amazon will not have to facea lawsuitaccusing it of misleading Prime subscribers by charging an additional fee to stream movies and TV shows without ads.
U.S. District Judge Barbara Rothstein on Wednesday dismissed the lawsuit, finding that the addition of commercials dont constitute a price increase but rather a modification to the subscription package. Amazon disclosed in its terms that the bundle of Prime benefits is subject to change, the court said.
Amazon last year pivoted to making its ad tier the default for its over 100 million subscribers, turning the service into a streaming-ad juggernaut. Users were required to pay an additional $2.99 per month to watch without ads, which they argued constituted a mid-subscription price increase. The movesparkeda proposed class action from consumers who had signed up for annual subscriptions. They claimed breach of contract and violations of consumer protection laws over the alleged bait and switch.
The ruling was grounded in the notion that subscribers purchased access to Prime Video rather than an ad-free version of the service. The introduction of commercials didnt result in any out-of-pocket price increase to subscribers who didnt pay the additional fee to watch without ads, the court said.
Rothstein pointed to Amazons terms, which state that the company reserves the right to suspend or discontinue any part of the service and that there may occasionally be changes. These terms give Amazon broad authority to modify Prime benefits, including Prime Video, at its discretion and without notice, according to the order.
The Court concludes that Amazons introduction of advertisements to Prime Video was not a price increase; it was a benefit modification, and such modification was specifically contemplated and authorized by the parties governing agreements, Rothstein wrote.
Amazon didnt immediately respond to a request for comment.
Policies and methods governing streaming subscriptions have been coming under increasing scrutiny. NBCUniversalon Wednesday agreed to pay $3.6 million to settle a lawsuit accusing it of failing to provide users an easy mechanism to cancel automatically renewingPeacocksubscriptions. This came after a federal appeals court struck down the FTCs click to cancel rule, which wouldve barred companies from making it more difficult to cancel a subscription than it is to sign up.