US FTC OKs $61.7M Settlement With Amazon Over Tips

The US Federal Trade Commission on Friday approved a consent order against Amazon that requires the company to pay $61.7m to resolve charges that for two and a half years it took tips intended for Amazon Flex drivers and concealed the diversion of funds.

The deal was proposed in February but required sign-off from the US trade watchdog. It arises from FTC charges that Amazon misrepresented both to Amazon Flex drivers and to the public what the company would pay for delivery work.

The tech giant launched its Flex service in 2015, promising drivers – which it classified as independent contractors and referred to as “delivery partners” – that it would pay $18-25 per hour for the delivery of goods from Amazon.com, Prime Now (household goods), Amazon Fresh (groceries), and Amazon Restaurant (takeout).

Amazon’s ads made promises like, “You will receive 100 per cent of the tips you earn while delivering with Amazon Flex.”

However, during the period from late 2016 through August 2019, drivers – who, as independent contractors, paid for their own car, fuel, maintenance, and insurance – saw only a portion of the promised gratuity when customers opted to tip.

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.