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ARTICLE · 10 FEBRUARY 2021

Amazon Settlement Provides Lessons For Other Advertisers

Frankfurt Kurnit Klein & Selz PC
Frankfurt Kurnit Klein & Selz PC
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Frankfurt Kurnit Klein & Selz PC

Frankfurt Kurnit Klein & Selz PC

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The FTC announced this week that Amazon is paying close to $62 million to settle charges that it stiffed Amazon Flex drivers on the tips they earned from customers.

United StatesMedia, Telecoms, IT, Entertainment

The FTC announced this week that Amazon is paying close to $62 million to settle charges that it stiffed Amazon Flex drivers on the tips they earned from customers. 

Why am I blogging about this as an advertising and marketing law issue?  Because the heart of the case is Amazon's advertising: according to the FTC's complaint, Amazon regularly and widely advertised that drivers participating in Amazon's Flex program as "delivery partners" for Amazon's various services would be paid an hourly fee for their work and that they'd receive "100% of the tips" paid by the customers. Amazon also consistently told its customers that 100% of the tips would go to the drivers.  

However, according to the FTC, rather than pass along 100% of the tips, Amazon secretly kept about a third of the tip money to subsidize its payments to the drivers. Further, "Amazon continued these practices for over two and a half years despite hundreds of complaints from drivers, critical media

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This post first appeared in Frankfurt Kurnit's Focus on the Data blog (www.focusonthedata.com). It provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

Originally published by the New York Legal Ethics Reporter

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

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