Economic Liberties Applauds DC AG Karl Racine’s Lawsuit Against Amazon’s Theft and Fraud

December 7, 2022 Press Release

Washington, D.C. — In response to a new suit filed by Attorney General Karl Racine against Amazon for stealing tips from delivery drivers through a scheme that tricked consumers and scammed workers, the American Economic Liberties Project released the following statement.

“Nearly two years after being forced to reimburse drivers, Amazon has faced no additional penalties for making theft and deception a core part of its business strategy,” said Pat Garofalo, Director of State & Local Policy at the American Economic Liberties Project. “Despite telling consumers and workers that 100% of tips would go to delivery drivers as part of Amazon Flex, Amazon routinely stole the extra profits to boost its bottom line and undermine local retailers that played by the rules — only stopping once it got caught. We applaud Attorney General Racine’s efforts to ensure Amazon faces significant consequences for its abuses and that such a practice never happens again.”

Attorney General Karl Racine’s suit targets Amazon’s Flex service, which changed its driver payment model in 2016 so that a large portion of tips did not go towards increasing drivers’ compensation, but towards increasing corporation’s profits and subsidizing its own labor costs. This change was not communicated clearly to drivers nor consumers, who believed they were directly paying drivers.

While Amazon was previously forced the reimburse drivers for this practice by the Federal Trade Commission, it has thus far escaped other forms of accountability, including civil penalties, for consumer harm. The office of the Attorney General’s suit seeks civil penalties for every violation of the Districts’ Consumer Protection Procedures Act (CPPA) and a Court order to ensure that Amazon is never able to engage in the practice again.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.