Washington, United States:
Amazon has agreed to spend $61.7 million to settle charges it withheld recommendations from its independent delivery drivers more than two and a half years, US officials mentioned Tuesday.
The US Federal Trade Commission mentioned the agreement settles a complaint that Amazon failed to give the complete tip amounts to drivers in its Amazon Flex system.
“Rather than passing along 100 percent of customers’ tips to drivers, as it had promised to do, Amazon used the money itself,” mentioned Daniel Kaufman, acting director of the FTC’s Bureau of Consumer Protection.
“Our action today returns to drivers the tens of millions of dollars in tips that Amazon misappropriated, and requires Amazon to get drivers’ permission before changing its treatment of tips in the future.”
The settlement bars Amazon from misrepresenting driver earnings, spend or % of recommendations paid to drivers, or altering its handling of recommendations without the need of drivers’ consent, the FTC mentioned.
Amazon is one of various e-commerce firms that have been accused of misappropriating recommendations though promising to give the complete amounts to drivers.
According to the FTC’s administrative complaint, the firm often advertised that drivers participating in the Flex system would be paid $18 to $25 per hour along with “100 percent of the tips you earn.”
In late 2016, the FTC alleged, Amazon shifted to a reduced hourly price without the need of disclosing this and utilized the consumer recommendations to make up the distinction. This resulted in hundreds of complaints from drivers, according to the agency.
The firm reverted to its earlier policy in August 2019 following the FTC started its investigation, according to the complaint.