New Jersey has brought a federal antitrust lawsuit against Amazon, accusing the online retail giant of using its dominant market position to suppress wages and impose poor working conditions on delivery drivers.
In a complaint filed Tuesday in the U.S. District Court for the District of New Jersey, Attorney General Jennifer Davenport alleges that Amazon holds “monopsony power” over companies participating in its Delivery Service Partner program and the drivers it employs.
A monopsony exists when a dominant buyer can dictate prices or other terms because sellers have few practical alternatives. In this case, New Jersey argues that Amazon is effectively the only buyer of the specialized services provided by its delivery partners.
This is the first time a state has accused a company of unlawfully preserving a monopsony, according to Davenport’s office.
Amazon launched the Delivery Service Partner program in 2018, recruiting entrepreneurs to establish small businesses that hire drivers and deliver packages for the retailer. Those companies now deliver about 20 million Amazon packages worldwide each day, according to the company.
Although Amazon describes its delivery partners as independent businesses, the state alleges that they rely so heavily on Amazon for packages, routes, vehicles, and other infrastructure, leaving them with little leverage to demand better pay or better working conditions for drivers.
The complaint also accuses Amazon of restricting delivery partners from recruiting drivers employed by other contractors in its network. New Jersey argues that the alleged “no-poach” policy reduces worker mobility as well as the pressure on employers to raise wages.
The lawsuit further contends that drivers who supported union organizing at one Amazon delivery station found themselves rejected or fired by other delivery partners in New Jersey and New York, according to the complaint.
“Amazon built a company worth trillions while subjecting drivers in its delivery network to artificially low pay and punishing working conditions thanks to its overwhelming power in the labor market,” Davenport said in a statement.
Amazon denied the allegations.
“This complaint is not grounded in fact,” a spokesperson said in a statement to The Epoch Times.
The spokesperson maintained that delivery partners make their own decisions about hiring, fleet management, and capacity planning. Amazon also said drivers are free to change employers and associate with whomever they choose.
Amazon also disputed the state’s characterization of drivers’ working conditions, saying that delivery partners manage their employees’ workdays and route execution.
“We’re confident the facts will speak for themselves in court,” the spokesperson said.
The lawsuit adds to broader scrutiny of Amazon’s delivery model.
Across the Hudson River in New York City, lawmakers are separately considering a bill that would require operators of last-mile delivery facilities to employ their delivery workers directly rather than relying on contractors.
Amazon has testified against the proposal, warning that it could threaten more than 40 delivery partners and over 5,000 jobs. If the bill became law, the company said, it would have to move its delivery facilities out of the city.
