FTC Approves Final Administrative Consent Order Against Amazon for Withholding Customer Tips from Amazon Flex Drivers
Following a public comment period, the Federal Trade Commission has approved a final administrative consent order against Amazon, which has agreed to pay more than $61.7 million to settle charges that it failed to pay Amazon Flex drivers the full amount of tips they received from Amazon customers over a two and a half year period.
According to the FTC’s administrative complaint, announced in February 2021, the company regularly advertised that drivers participating in the Flex program would be paid $18-25 per hour for their work making deliveries to customers. The ads, along with numerous other documents provided to Flex drivers, also prominently featured statements such as: “You will receive 100% of the tips you earn while delivering with Amazon Flex.”
The FTC’s complaint alleges that Amazon also assured its customers that 100 percent of any tips they paid would go to the driver. According to the complaint, the company stopped the challenged conduct only after becoming aware of the FTC’s investigation in 2019.
The final order requires Amazon to pay $61,710,583, which represents the full amount that the company allegedly withheld from drivers and will be used by the FTC to compensate drivers. In addition, Amazon will be prohibited from misrepresenting any driver’s likely income or rate of pay, how much of their tips will be paid to them, as well as whether the amount paid by a customer is a tip.
Amazon also will be prohibited from making any changes to how a driver’s tips are used as compensation without first obtaining the driver’s express informed consent. The company will be subject to the Commission’s final order for twenty years and liable for civil penalties of up to $43,792 per violation should it violate that order.
The Commission vote approving the final consent order was 4-0.
Additional information available on the refunds page. Amazon drivers can sign up for email updates on the status of the refund process.
The FTC’s interactive dashboards for refund data provide a state-by-state breakdown of FTC refunds. In 2020, FTC actions led to more than $483 million in refunds to consumers across the country, but recently the United States Supreme Court ruled the FTC lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the FTC’s ability to get money back for consumers.
The Federal Trade Commission works to promote competition and to protect and educate consumers. You can learn more about consumer topics and report scams, fraud, and bad business practices online at ReportFraud.ftc.gov. Like the FTC on Facebook, follow us on Twitter, get consumer alerts, read our blogs, and subscribe to press releases for the latest FTC news and resources.
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