Subscribers entered the suit in a Seattle court last year, alleging that Amazon misled them into believing they could continue to access Prime Video ad-free on their existing subscriptions.

A judge on Wednesday dismissed a proposed class action lawsuit against Amazon.com's (AMZN) decision to feature ads on Prime Video for paid subscribers unless they pay extra for ad-free viewing, according to a Reuters report.

Amazon introduced ads on its streaming service in the U.S. in early 2024, gradually expanding the ad-supported model to more users domestically and in select international markets.

The streaming service began showing ads by default to users on its base tier, which costs $8.99 per month, and rolled out an ad-free viewing plan for $11.98. The prices for the annual plans were similarly bumped up.

In February, Amazon faced a proposed lawsuit in a Seattle court, which alleged that the company violated the terms of its agreement and Washington state consumer protection laws.

Plaintiffs said Amazon had led them to believe the Prime Video would remain ad-free as per their existing subscription plans.

According to the report, U.S. District Judge Barbara Jacobs Rothstein concluded, however, that the ads were a "benefit modification" specifically contemplated and authorized by Amazon and the subscribers.

The dismissal comes as Amazon expands its Prime Video business by introducing ads and adding more live sports content. The moves are aimed at boosting revenue and user base at a time when streaming growth has slowed from its peak during the COVID lockdown era.

Amazon does not break down the revenue from Prime Video. In 2024, the company's Subscription Services, which include Prime Video and other Prime services, accounted for about 7 % of the company's total revenue.

AMZN shares are up 1.7% year-to-date.

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