Amazon.com, Inc. (NASDAQ: AMZN) agreed to pay more than $61.7 million to settle a complaint filed by the Federal Trade Commission (FTC) alleging that it pocketed customers’ tips for Amazon Flex drivers.
Under the terms of the settlement agreement, the FTC will use that amount to compensate Flex drivers who did not receive 100% of the tips paid to them by customers.
Amazon will be prohibited from misrepresenting Flex drivers’ likely income or rate of pay. Also, the company will be prohibited from making any changes to how it uses tips for drivers. It must obtain drivers’ express informed consent before using tips as compensation.
In a statement, FTC Bureau of Consumer Protection Acting Director Daniel Kaufman said, “Rather than passing along 100 percent of customers’ tips to drivers, as it had promised to do, Amazon used the money itself. 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.”
Details of the FTC complaint against Amazon
On Tuesday, the FTC disclosed its administrative complaint against Amazon.com and its subsidiary, Amazon Logistics.