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DC Attorney General Karl A. Racine announced Wednesday that his office had filed a consumer protection lawsuit against Amazon, alleging that the e-commerce giant stole tips from drivers and misled consumers about the model of tips.
The lawsuit alleges that Amazon used deceptive methods to make consumers believe that tip money was going directly to drivers, when in fact it was used to subsidize wages. (Amazon founder Jeff Bezos owns Mademoiselleosaki.)
“Too often workers in the District of Columbia and across our country are taken advantage of and not paid their hard-earned wages,” Racine said in a statement. “In addition, consumers need to know where their tips are going. This lawsuit is about providing workers with the tips they are owed and telling consumers the truth. Amazon, one of the richest companies in the world, certainly doesn’t need to accept tips that belong to workers.”
The lawsuit concerns Amazon Flex, a service launched in 2015 that offers fast delivery. When it launched, the company encouraged consumers to tip delivery drivers and ensured that 100 percent of the tip would go to the drivers.
According to the lawsuit, in 2016, Amazon changed the model so that drivers could no longer see tip amounts for each delivery, and instead, a large portion of tips were used to pay already promised wages to drivers. The lawsuit further alleges that the company misled consumers and workers about the model by hiding the reality of the tipping policy.
An Amazon spokesperson said in an email that the lawsuit was without merit, adding that the company had changed its model in 2019 and had a compensation framework in place that ensures DC drivers earn more than the District’s minimum wage.
In 2021, Amazon reimbursed Amazon Flex drivers as part of a settlement with the Federal Trade Commission (FTC) and agreed to a national court order that prohibits the company from changing the way driver tips are handled without notifying them. drivers in advance.
“Nothing is more important to us than customer trust. This lawsuit involves a practice we changed three years ago and is without merit: all tips from the customers in question were already paid to drivers as part of a settlement last year with the FTC,” Amazon spokeswoman Maria Boschetti said. , in a statement on Wednesday.
Racine argued that the company has yet to be held liable for “consumer harm” violations of DC’s Consumer Protection Procedures Act (CPPA), which prohibits deceptive and unfair trade practices, such as misleading consumers.
The attorney general’s office is seeking civil penalties for each violation of the CPPA, payment to the District for the costs of the case, and an injunction to ensure the company cannot engage in the practice again.
This is the second lawsuit Racine has filed against the industry giant. In 2021, his office filed an antitrust lawsuit against the company, alleging that Amazon had monopoly power that resulted in higher prices for consumers. A DC Superior Court judge dismissed the antitrust suit earlier this year.
In April, the OAG and the US Department of Justice urged the court to reconsider its dismissal of the antitrust lawsuit against Amazon. Then, in August, the Attorney General’s Office filed a notice of appeal. The city and Amazon are due to make their arguments in the DC Court of Appeals by the end of January before the case moves forward.
Source: news.google.com