Amazon Will Pay $8.25 Million Over Slow Delivery In Predominantly Black D.c. Neighborhoods

When Sehree Mickel moved to Southeast D.C. from Alexandria in 2020, she brought her Amazon Prime subscription with her. She’d been a member for years, relying on Amazon for quick purchases and promised two-day delivery.

As she settled into her new neighborhood east of the Anacostia River, two-day delivery turned into three. Then four. Sometimes she’d wait an entire week before receiving her package, all while still paying full price for her Prime membership.

She’s one of 69,000 residents in two predominantly Black neighborhoods affected by Amazon’s decision to stop in-house delivery to parts of the District, instead contracting out to other mail carriers and prolonging the amount of time it takes to receive an order — all while still charging $14.99 per month and promising two-day delivery.

The D.C. Attorney General’s Office announced Thursday that Amazon agreed to a $8.25 million settlement for a 2024 lawsuit filed by the District of Columbia over the business practice, which D.C. alleged violated consumer protection laws. Amazon will refund $7.25 million in subscription fees to the affected customers and pay $1 million in penalties directly to the District. Customers will get back about half of their total Prime membership fees paid from June 2022 to April 2026.

The settlement also requires Amazon to inform Prime members and the D.C. Attorney General’s Office of any future delivery exclusions.

“Amazon deceived thousands of its customers who live East of the River, collecting their Prime membership fees while secretly excluding them from full Prime membership benefits,” D.C. Attorney General Brian Schwalb said in a statement Thursday. “No company is above the law, no matter how big or powerful.”

The settlement is not an admission of fault. Amazon spokesperson Steve Kelly said Amazon entered the agreement to avoid prolonged litigation and stay focused on delivering customers high quality service.

He said Amazon started using third party delivery services after in-house drivers faced safety threats in the area. Once those risks were not as prevalent, in-house delivery resumed.

“The safety of our customers and the drivers delivering to them has always guided our operational decisions — full stop,” he said. “Claims that our practices, at any point, were deceptive are false — we’re transparent with customers about delivery timelines throughout.”

The settlement is the latest in a series of lawsuits against the e-commerce giant. Amazon agreed to pay D.C. $3.95 million last year to settle 2022 allegations of stealing tips from delivery drivers, though the company did not admit to the allegations or other violation of law.

Amazon also settled a lawsuit last year with the Federal Trade Commission where the company agreed to pay $2.5 billion over allegations it tricked people into signing up for Prime and made it hard to cancel. It’s one of the largest settlements in U.S. history.

As for Mickel, she said a settlement is the least Amazon can do after treating her neighborhood, filled with seniors, low-income households and marginalized people, as “less than.” She said her neighbors deserve the Prime perks they pay for.

“They still tried to take advantage of us … because we are in that low-income bracket, because we do have the melanin skin, because we do not look holistically like our neighbors on the other side of the river,” she said. “I do believe it was racism and I do believe as a trillion dollar company and the practices that they had, they can hide behind that.”