The attorney general of the District of Columbia sued Amazon on Dec 4, accusing it of violating consumer protection laws by making slower deliveries to Prime members in historically lower-income neighbourhoods.
In one of the first complaints of its kind, which was filed with the Superior Court of the District of Columbia, Attorney General Brian L. Schwalb said Amazon had deliberately and secretly stopped its fastest delivery service to the nearly 50,000 Prime subscribers in certain ZIP codes that were lower-income neighbourhoods.
According to the lawsuit, Amazon has used third parties like United Parcel Service and the US Postal Service to make Prime deliveries in those areas for the past two years. That resulted in slower deliveries than those made by Amazon’s own delivery drivers, who serve other Washington residents.
Amazon “cannot covertly decide that a dollar in one ZIP code is worth less than a dollar in another”, Schwalb said in a statement. “We’re suing to stop this deceptive conduct and make sure District residents get what they’re paying for.”
Amazon told Schwalb that it had made the change because of safety concerns in those neighbourhoods, the attorney general said. He said the company had violated consumer protection laws by failing to disclose the change to consumers.
Amazon said that it disagreed that it had deceived customers and that it had informed Prime subscribers in those areas about each stage of the delivery process. The company said it tried to work with the office of the attorney general to support crime prevention and improve safety for drivers in those areas.
“The claims made by the attorney general, that our business practices are somehow discriminatory or deceptive, are categorically false,” said Kelly Nantel, a spokesperson for Amazon. “We want to be able to deliver as fast as we possibly can to every ZIP code across the country, however, at the same time, we must put the safety of delivery drivers first.”
The suit adds to growing regulatory scrutiny of Amazon’s treatment of customers. The District of Columbia sued the company in 2021 over price-fixing allegations, a case that an appeals court revived in August. In a suit filed last year, the Federal Trade Commission accused Amazon of illegally protecting a monopoly over swaths of online retail by squeezing merchants and favouring its own services, causing “artificially higher prices”. The case is pending.
At the heart of the District of Columbia’s latest lawsuit is Amazon’s Prime membership service, which costs US$139 (RM615) annually and includes offers for same-day, one-day and two-day delivery.
Until 2022, Amazon used its own logistics network to make deliveries to residents in lower-income areas of the city east of the Anacostia River, according to the suit. But then Amazon began outsourcing those deliveries.
The change was not disclosed to customers and created longer delivery times for those neighbourhoods than for the rest of the city, according to Schwalb.
In 2023, for example, the rest of the city’s Prime members received their packages within two days of checkout 75% of the time. But subscribers in the affected ZIP codes received their packages within two days only 24% of the time, according to the lawsuit. – ©2024 The New York Times Company
