|
The
settlement came four years after Amazon forked over $61.7
million to resolve a complaint the Federal Trade Commission
brought over similar accusations.
In 2022, the office of DC's attorney general at the time
followed up with a lawsuit alleging Amazon violated the
District’s consumer protection laws by misleading residents
about how tips paid digitally were used.
According to the lawsuit, the affected drivers were part of
Amazon’s Flex business, which allows people to deliver Amazon
packages with their own cars.
DC’s lawsuit said that after launching the program in 2015, the
company represented to consumers that all tips added during
check-out for Amazon Flex orders would go to drivers.
But both the District and the FTC alleged that Amazon changed
its payment model in late 2016 to lower its costs but did not
disclose the switch to either customers or drivers.
In particular, the FTC's previous complaint alleged the company
algorithmically reduced its own wages for drivers in different
locations using data it collected about average tips in a
specific area. Amazon then used the tips to make up the
difference between its new base pay and the $18-25 per hour it
had promised drivers, the complaint said.
The FTC said Amazon didn’t stop taking the tips until 2019, when
the company found out about the agency's investigation into the
issue.
Amazon has denied the allegations and did not admit to
wrongdoing as part of the settlement announced Friday.
“Like any successful program, Amazon Flex has evolved over time,
and this lawsuit relates to a practice we changed more than five
years ago,” Amazon spokesperson Steve Kelly said in a statement.
Under the terms of the settlement, the company will pay $2.45
million in penalties plus $1.5 million in legal fees. It must
also disclose on its website and app how tips impact driver
earnings.
All contents © copyright 2025 Associated Press. All rights reserved
|
|
