Munich Regional Court Ruling: Ads on Amazon Prime Video Are Impermissible
On December 7, 2023, the Munich Regional Court I clarified that the advertisements introduced in spring 2024 by Amazon to its subscription service Prime Video violate applicable contract law. In proceedings against Amazon, the Federation of German Consumer Organisations (vzbv) argued that the subsequent integration of ads without the explicit consent of existing customers was not compatible with the original contract terms. The court agreed with this argument (Case No. 33 O 3266/24).
Background and Issue in Dispute
Change to Prime Video Service Terms
When ad breaks were introduced to its streaming service, Amazon did not require separate consent to modify the contract from existing customers. Customers who had taken out a Prime or Prime Video subscription before the ad announcement had to actively object if they did not accept the change; otherwise, the adaptation of the streaming service was deemed accepted. An additional charge was required for ad-free use.
Consumer Association’s Legal Action
The Federation of German Consumer Organisations challenged this change as an inadmissible unilateral contract modification to the detriment of consumers. In particular, the revised terms of use and the opt-out procedure were viewed with legal concern. The association argued that the original promise of service—streaming without commercial breaks—was an integral part of the contract, which Amazon could not subsequently alter without further ado.
Court’s Decision
Key Points of the Decision’s Reasoning
The Munich Regional Court I ruled in favor of the consumer association. Decisively, a streaming subscription at the time of contract conclusion did not provide for any visible advertising. If, during an ongoing contractual relationship, the scope of service is unilaterally restricted to the detriment of customers, such a change is not covered by existing terms and conditions—particularly if no explicit customer consent is obtained, in the court’s view.
Furthermore, the court emphasized that a significant change in service cannot be based solely on information or an objection process. Referring to existing obligation to inform or notify does not replace the legally required customer consent for a fundamental modification of the contract’s substance.
Implications for Other Streaming Providers
The ruling specifically relates to Amazon’s contract design for customers with existing Prime Video subscriptions. Nevertheless, the reasoning may apply to similarly structured contract models of other providers. It remains to be seen whether, and to what extent, further streaming service providers will implement comparable changes to their services or could be affected by further legal proceedings.
Legal Remedies and Case Status
Following the decision of the Munich Regional Court I, it is currently unknown whether Amazon has appealed the judgment. Thus, it should be noted that court decisions at this stage are only fully binding once they become final. Source: https://urteile.news/LG-Muenchen-I_33-O-326624_Verbraucherzentrale-gewinnt-gegen-Amazon-Einfuehrung-von-Werbung-bei-Prime-Video-war-unzulaessig~N35652
Conclusion and Information for Businesses
This decision highlights the necessity of carefully reviewing and adjusting contractual terms, especially for intended changes to existing service commitments in ongoing contractual relationships. For companies, investors, and other market participants, it may be advisable to regularly review processes and contract design in the streaming and digital distribution sectors. If you require further legal assessment of complex contract clauses and amendments, MTR Legal is available as your contact for legal advice in contract law.
