Amazon has been hit by a lawsuit accusing it of violating consumer protection laws by providing slower delivery services to Prime members in historically lower-income neighborhoods.
The complaint has been filed by the attorney general of the District of Columbia, Brian L. Schwalb at the Superior Court of the District of Columbia. It marks one of the first cases of its kind against Amazon.
The Allegations
The lawsuit claims Amazon deliberately stopped offering Prime to nearly 50,000 subscribers in certain low-income ZIP codes.
Instead, the company outsourced deliveries in these areas to third parties like United Parcel Service (UPS) and the Postal Service. This led to slower delivery times.
The complaint claims Amazon failed to inform Prime members in the affected neighborhoods about the change in delivery logistics, violating consumer protection laws.
Amazon reportedly told the attorney general’s office that the decision was made due to safety concerns for its delivery drivers in these areas.
Attorney General’s Statement
Attorney General Schwalb said:
“Amazon cannot covertly decide that a dollar in one ZIP code is worth less than a dollar in another. We’re suing to stop this deceptive conduct and make sure District residents get what they’re paying for.”
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Amazon’s Response
Amazon has denied the allegations of discrimination and deception,
Spokeswoman Kelly Nantel said:
“The claims made by the attorney general, that our business practices are somehow discriminatory or deceptive, are categorically false. We must put the safety of delivery drivers first.”
Amazon also expressed willingness to work with the attorney general’s office to address safety concerns and support crime prevention in the affected areas.
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Impact on Prime Members
Amazon’s Prime service, costing $139 annually, promises same-day, one-day, and two-day delivery options.
According to the lawsuit, in 2023, 75 percent of Prime members in wealthier neighborhoods received their packages within two days. In contrast, only 24 percent of Prime subscribers in the affected low-income areas experienced the same delivery speed.
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Broader Regulatory Context
This lawsuit adds to growing regulatory scrutiny of Amazon’s practices, including:
- Price-Fixing Allegations: In 2021, the District of Columbia sued Amazon for alleged price-fixing, a case revived by an appeals court in August.
- FTC Antitrust Case: In 2022, the Federal Trade Commission filed a lawsuit accusing Amazon of monopolistic practices, including squeezing merchants and favoring its own services, resulting in higher prices for consumers.
Looking Ahead
The outcome of this lawsuit could have significant implications for Amazon’s Prime delivery practices and its treatment of customers in underserved areas.
As regulatory pressure mounts, the case highlights the importance of transparency and equity in the delivery of services promised to paying subscribers.
