Washington, D.C. sues Amazon for alleged delivery discrimination
Amazon is accused of purposely offering slower delivery in certain neighborhoods of the nation’s capital.
Brian L. Schwalb, attorney general of Washington, D.C., filed a lawsuit against Amazon.com Inc. on Wednesday, Dec. 4, 2024, for allegedly deceiving District residents into paying for Prime delivery benefits they are not receiving, in violation of District consumer protection law.
Specifically, the suit claims that since June 2022, Amazon has secretly excluded two District ZIP codes east of the Anacostia River from its advertised fastest delivery service while continuing to charge approximately 48,000 Prime members living there the full Prime subscription price.
According to the suit, in June 2022, Amazon made a secret internal decision to stop using its owned fleet of trucks to make Prime deliveries to DC ZIP codes 20019 and 20020; and instead exclusively make deliveries in these ZIP codes with third-party delivery services like UPS and the US Postal Service, which it knows are often slower than its own.
The suit also alleges that it never informed existing or prospective Prime members living in those ZIP codes of that exclusion and misled any consumers living there who complained of slow Prime deliveries to believe it was a coincidence.
While companies are legally permitted to make operational changes to protect their employees, they are required to inform customers of any resulting adverse impacts those changes will have on the quality of service.
"Amazon is charging tens of thousands of hard-working Ward 7 and 8 residents for an expedited delivery service it promises but does not provide," said Schwalb. "While Amazon has every right to make operational changes, it 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."
Since 2022, Prime membership has cost $14.99 a month or $139 per year. In 2021, before Amazon implemented its alleged "exclusion," the suit claims that more than 72% of Prime packages in the affected ZIP codes were delivered within two days of check-out.
But in 2023, after Amazon is said to have implemented its “exclusion,” only 25% of Prime packages in ZIP code 20019 and only 24% in ZIP code 20020 were delivered within two days of check-out, according to the suit.
In a statement to CNBC, an Amazon spokesperson said the company has simply adjusted delivery procedures in the affected ZIP codes to ensure driver safety and has offered to work with Schwalb to reduce crime and improve safety in those areas.
"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 spokesperson said in the statement. "In the ZIP codes in question, there have been specific and targeted acts against drivers delivering Amazon packages. We made the deliberate choice to adjust our operations, including delivery routes and times, for the sole reason of protecting the safety of drivers."
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The suit seeks to stop Amazon from engaging in unfair and deceptive practices and to obtain restitution and damages for affected Prime members in ZIP codes 20019 and 20020, as well as civil penalties and costs payable to the District. A copy of the suit is available here.
