WASHINGTON — The DC attorney general is suing Amazon, the company that they say serves tens of thousands of residents in the D.C. area, alleging that the company has previously stolen their delivery driver's tips.
Attorney General Racine, who has called the alleged theft "a deceptive, illegal scheme" said that the operation made consumers believe they were increasing drivers' pay when Amazon was actually diverting tips to reduce its own labor costs and increase profits, according to his office.
"Amazon repeatedly told consumers, through marketing materials and at the point of sale, that 100% of tips would be passed to their delivery drivers," Racine's office said in their complaint. "By allowing consumers to increase the amount of the 'tip,' Amazon created the impression that a larger 'tip' would make for a larger payment to the driver. Instead, in many instances, only Amazon benefitted from higher 'tips'—the more consumers 'tipped,' the less Amazon had to pay out of its own budget to drivers."
Racine's office now asks the court to declare that the alleged practices violated the Consumer Protection Procedures Act (CPPA), to enjoin any additional CPPA violations, and to assess civil penalties proportional to Amazon’s alleged misconduct in order to deter the company and any other merchants from soliciting tip money from DC consumers to subsidize their own labor costs.
"While Amazon later paid single-damages restitution for this conduct as part of a settlement with the Federal Trade Commission (“FTC”), multiple FTC Commissioners noted that Amazon’s 'outrageous' conduct would have warranted more than just restitution if the agency possessed authority to award penalties," Racine's office said. "Amazon has thus far escaped any other consequences."
Amazon agreed to pay more than $61.7 million to settle charges that it failed to pay Amazon Flex drivers the full amount of tips they received from Amazon customers over a two-and-a-half-year period, according to the FTC in June 2021.
Racine said that his office will now work to hold the company to full account.
"My office will use every tool available to hold Amazon—and any company that lies to consumers and cheats workers—accountable. Amazon is one of the richest companies in the world. It can and must do better," he posted to Twitter Wednesday.
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