Amazon on Thursday settled a lawsuit brought by the District of Columbia over claims it made slower deliveries in the city’s low-income neighborhoods, as the e-commerce giant faces pressure from government officials over how it runs its vast logistics network.
The lawsuit, filed in 2024 by Attorney General Brian Schwalb in Superior Court of the District of Columbia, argued Amazon had excluded two ZIP codes from its in-house Prime delivery services. Those ZIP codes covered historically low-income areas, the lawsuit said. The company failed to inform customers about the slower deliveries and violated the District of Columbia’s consumer protection laws, according to the lawsuit.
Under the terms of the settlement, Amazon will refund $7.25 million in Prime membership fees to affected customers, according to a news release. The company will also pay a $1 million penalty to the district and agreed 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.
“Amazon deceived thousands of its customers,” Schwalb said in a news release. “Now, we’re putting more than $7 million back in the pockets of people who were taken advantage of.”
An Amazon spokesperson, Steve Kelly, said the company had never deceived anyone about the deliveries and in “no way is this settlement an admission of wrongdoing.”
“Rather than engage in prolonged litigation, we chose to resolve this matter so we can stay focused on what we do best: delivering great service to every customer across Washington, D.C.,” he said.
Amazon faces new pressure over the way it operates its sprawling web of warehouses, trucks and drivers that ferry goods to its customers. New York City Mayor Zohran Mamdani this year endorsed local legislation that would require Amazon and other delivery companies to directly employ drivers, rather than treating them as contractors. Chicago is considering similar legislation, which is supported by unions.
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This article originally appeared in The New York Times.