New Jersey’s attorney general sued Amazon under federal antitrust law on Tuesday, accusing the company of abusing its market power to suppress pay for delivery companies and their drivers that bring packages to customers’ doorsteps.
The lawsuit, filed in United States District Court for the District of New Jersey, claimed that Amazon abused its role as the dominant buyer in a market to control its network of delivery companies, limit their growth and micromanage nearly all aspects of their business, including the pay and working conditions of drivers.
“Amazon has too much power as a buyer of the labor of thousands of New Jerseyans who deliver packages to our doorsteps,” Jennifer Davenport, New Jersey’s attorney general, said at a news conference. “And because of that power, those workers are forced to accept lower wages and appalling conditions.”
Amazon said characterizations of the company in the lawsuit were wrong and that the contractor companies, which it calls delivery service partners, control their own destiny.
“The truth is, D.S.P.s are independent business owners who make their own decisions about hiring, fleet management and capacity planning — and they choose whether to work with other companies besides Amazon,” Steve Kelly, an Amazon spokesman, said in a statement. He said the company was confident it would prevail in court.
Amazon used to rely heavily on the U.S. Postal Service and United Parcel Service to deliver its packages. But building its own delivery network has been the heart of its efforts to offer cheaper and faster shipping. Last year, Amazon surpassed the Postal Service to become the largest parcel carrier in the United States, according to ShipMatrix, a logistics consultancy.
There are thousands of delivery service partners, which employ hundreds of thousands of drivers. But the case focuses on the New Jersey market, as well as the New York City region, including all five boroughs.
The state’s lawsuit claims that since 2018, Amazon built a network of contractor companies that are entirely dependent on Amazon for their existence. They typically use Amazon vans, Amazon routing software, Amazon uniforms and employment policies.
“They practically cannot resist what Amazon tells them to do,” Ms. Davenport said.
The lawsuit argued that Amazon prevents the delivery service partner companies from growing too large with the aim of limiting their bargaining power. The suit also claimed that Amazon has had policies that prohibit D.S.P.s from hiring drivers from other delivery companies in its program, which can suppress their wages.
Amazon also uses its power to punish companies and workers that unionize, including in Queens, according to the lawsuit. It said various delivery companies, at different locations, used similar scripts and posters to share anti-union messages with drivers.
“Independent small businesses do not produce identical messaging at scale by coincidence,” the lawsuit said.
Amazon denied those claims. “D.S.P. employees are free to choose their employer and associate with who they want, full stop,” Mr. Kelly said.
The attorney general asked for injunctive relief, including prohibiting Amazon from terminating, or threatening to terminate, contracts with delivery companies to prevent unionization. The lawsuit also called for compensation it claims the delivery companies and their drivers would have received were it not for the anticompetitive conduct.
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