New Jersey sued Amazon on Tuesday, alleging the e-commerce giant illegally used its dominance over its package-delivery network to suppress wages and working conditions for thousands of delivery drivers while preventing them from organizing.
The lawsuit, filed in federal court in New Jersey, alleges Amazon violated federal and state antitrust laws through its Delivery Service Partner, or DSP, program, arguing the company exercises unlawful "monopsony," or a dominant buyer's ability to dictate prices and terms-over the small businesses that deliver Amazon packages and the drivers they employ.
Unlike traditional monopoly cases focused on consumer prices, New Jersey argues Amazon used its buying power to hold down compensation for delivery contractors and drivers by making DSPs almost entirely dependent on the company while tightly controlling their operations. The complaint alleges Amazon dictates routes, hiring, compensation, performance standards and other aspects of the businesses, leaving them with little ability to negotiate or work for other customers.
The state also alleges Amazon discouraged unionization by terminating or threatening to terminate delivery contractors whose workers attempted to organize and restricted competition among contractors through policies that prevented them from recruiting each other's drivers. The complaint points to organizing efforts at an Amazon delivery station in Queens, N.Y., where it alleges Amazon reduced routes, laid off workers and ultimately terminated a contractor after union activity.
New Jersey Attorney General Jennifer Davenport is seeking treble damages, a court order barring the alleged anticompetitive practices and preliminary injunctive relief to prevent Amazon from terminating additional DSPs during the litigation.
The complaint alleges DSP drivers earn substantially less than workers at United Parcel Service, FedEx and the U.S. Postal Service while working under demanding conditions that include constant electronic monitoring, opaque performance metrics and pressure to meet delivery quotas. It also alleges Amazon maintained policies that effectively prevented drivers from moving between delivery contractors, limiting competition for labor and keeping wages below competitive levels.
Amazon has long maintained that DSPs are independent businesses that operate their own companies and employ their own. The lawsuit adds to mounting legal scrutiny of Amazon's labor and logistics practices.
