Amazon has settled a lawsuit brought by the District of Columbia over claims the e-commerce giant deliberately made slower deliveries in some of the city’s low-income neighborhoods. The settlement, announced October 1, comes as the e-commerce giant faces pressure from government officials over how it runs its vast logistics network, reports The New York Times.
The lawsuit charged Amazon with excluding two ZIP codes that covered historically low-income areas from its Prime delivery services, even if customers in those areas had paid for Prime service. The lawsuit, filed in 2024 by Attorney General Brian Schwalb in Superior Court of the District of Columbia, alleges Amazon failed to inform customers about the slower deliveries, thereby violating the District of Columbia’s consumer protection laws.
Posting on X, Schwalb said Amazon will refund thousands of Prime members in Wards 7 and 8 for secretly excluding them from delivery services. The exclusions have been lifted, he said, and Amazon will also be required to change its practices. “No corporation is too big to get away with deceiving DC residents,” Schwalb warned.
Amazon will refund $7.25 million in Prime membership fees to affected customers, and will also pay a $1 million penalty to the district, further promising to notify Amazon customers there of future restrictions on its delivery service. The attorney general’s office said roughly 69,000 members of Amazon’s Prime service experienced slower deliveries as a result of Amazon’s practices.
An Amazon spokesman, Steve Kelly, said the company had never deceived anyone about the deliveries and in “no way is this settlement an admission of wrongdoing.”
“The safety of our customers and the drivers delivering to them has always guided our operational decisions — full stop. In the zip codes at issue, drivers faced specific, documented safety threats, and we adjusted operations to protect them, while still supporting delivery through other carriers," Kelly said in a statement to SupplyChainBrain. "Since this time, conditions have improved and packages are again being delivered to customers in these areas by DSPs and Amazon Flex delivery partners. However, claims that our practices, at any point, were deceptive are false — we’re transparent with customers about delivery timelines throughout."
