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Amazon to pay $61.7 million to settle FTC charges

Amazon to pay $61.7 million to settle FTC charges
Amazon earnings: Strong sales, but costs are going up

The FTC alleged Amazon failed to pay its Flex drivers the full amount of tips they were owed, and that it amounted to a deceptive business practices. The $61.7 million represents the amount that Amazon allegedly withheld from its drivers over a two and a half year period – and now, the agency will use the settlement to refund drivers who were affected.

Amazon attracted drivers by promising them $18–$25 per hour plus "100%" of the tips they received, according to the FTC's complaint. But ultimately, the company began to divert 30% of those tips back to itself.

"The conduct alleged in the complaint is outrageous," said acting FTC Chairwoman Rebecca Slaughter and FTC Commissioner Noah Phillips in a joint statement.

The FTC said Amazon stopped using the new pricing model in 2019, "after the company received notice of the FTC's investigation."

FTC Commissioner Rohit Chopra called on the agency, suggesting it to go even farther and use its civil penalty authority against Amazon in order to hold the company accountable. "Companies should succeed only when they compete, not when they cheat or abuse their power," Chopra wrote. "While is one of the largest, most powerful, and most feared firms in the world, the company cannot be above the law. Regulators and enforcers in the United States and around the globe can no longer turn a blind eye."

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