D.C. Attorney General Karl Racine announced today that his office is launching a lawsuit against Amazon for allegedly stealing tips from drivers. The lawsuit says the company used illegal and deceptive methods that “tricked” consumers into thinking their money was going directly to workers, while it was actually being used to reduce the company’s labor costs and increase its profits.

“Workers in the District of Columbia and throughout our country are too often taken advantage of and not paid their hard-earned wages,” said Racine in a statement. “What’s more, consumers need to know where their tips are going. This suit is about providing workers the tips they are owed and telling consumers the truth. Amazon, one of the world’s wealthiest companies, certainly does not need to take tips that belong to workers. Amazon can and should do better.”

The 17-page lawsuit stems from the 2015 launch of Amazon Flex, a service that offers customers quick delivery of its products. At the time, Amazon assured customers that 100% of tips would be given to workers.

According to the OAG, Amazon changed their policy in late 2016 to stop displaying tip amounts to drivers while also reducing them. The document goes on to say that Amazon used more than $1 million received in tips to pay for labor costs.

While Amazon went on to reimburse drivers as part of a settlement with the Federal Trade Commission in 2021, the OAG alleges that Amazon avoided civil penalties for “consumer harm” after violating the District’s Consumer Protection Procedures Act. The law prohibits a range of deceptive business practices – including misleading customers, misrepresentation, and failing to disclose information about services.

In response to the lawsuit filing, a spokesperson for Amazon said the issue had been resolved in the 2021 settlement.

“Nothing is more important to us than customer trust. This lawsuit involves a practice we changed three years ago and is without merit – all of the customer tips at issue were already paid to drivers as part of a settlement last year with the FTC,” said Maria Boschetti.

The OAG is seeking civil penalties for each violation of the CPPA, as well as any payment to the District for costs brought on by the case. The lawsuit is also asking for a court order against Amazon to ensure the company cannot engage in the same alleged practices again.