The attorney general of the state of Washington D. is suing Amazon.com Inc. for civil penalties for misrepresenting consumers who thought they were tipping delivery drivers but had the money diverted to cover couriers base pay.
The case, filed in Washington DC Superior Court, is based on a 2021 settlement between the company and the Federal Trade Commission, in which the agency found that Amazon withheld tips meant for its gig-economy drivers for more than two years.
The FTC said that drivers would receive 100% of the value of tips, but Amazon instead used a portion of the gratuities to pay the base rate for its drivers. The Seattle-based company agreed to pay $61.7 million to settle the matter, which was earmarked for drivers. At the time, Amazon spokespeople said the company disagreed that its prior pay practices were unclear.
My office is suing Amazon for stealing tips from delivery drivers in a deceptive, illegal scheme that made consumers think they were increasing drivers pay when Amazon was actually diverting tips to reduce labor costs and increase profits, according to a post on Twitter by Washington DC attorney general Karl Racine.
Customer trust is more important to us than that, according to Amazon spokesperson Maria Boschetti, who said in a emailed statement. A practice we changed three years ago is without merit. All of the customer tips at issue were already paid to drivers as part of a settlement with the FTC last year. Racine seeks restitution, finding that Amazon's actions violated consumer protection statutes and civil penalties. Racine s office had sued Amazon last year, alleging that the company engaged in anticompetitive practices that drove up prices for consumers. A judge dismissed the case, saying there wasn't enough evidence to support the claims. Racine tried to revive it.
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