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‘How Greedy Can Amazon and Bezos Get?’: Corporate Behemoth to Pay $62 Million Fine for Stealing Drivers’ Tips – Kenny Stancil (02/05/2021)

While welcoming Tuesday’s announcement that Amazon will pay more than $61.7 million to reimburse Flex workers after an investigation by the Federal Trade Commission accused the company of stealing nearly one-third of the tips meant for delivery drivers for over two years, progressives are saying the incident should lead lawmakers to enact more substantive reforms to reduce the corporation’s largely unregulated monopoly power, which threatens to derail what’s left of democracy.

“We can’t have fairness in the economy, or in our democracy, with this much concentrated power.”
—Robert Weissman, Public Citizen

“This is extraordinary and egregious behavior,” Public Citizen president Robert Weissman said in a statement in response to the FTC’s settlement announcement. “One of the world’s largest companies, under the control of the richest person on the planet, allegedly deceived its contract workers so it could pocket millions of tip income they were owed.”

As the New York Times reported, the FTC charged Amazon with depriving Flex drivers, classified by the company as independent contractors who use their own vehicles to deliver items, of nearly $62 million of income—secretly slashing workers’ wages and then using customers’ tips to camouflage the pay cut:

Amazon had promised its Flex delivery drivers that they would receive 100% of all customers’ tips. But starting in 2016, the FTC said, Amazon secretly lowered the hourly delivery wages, which were advertised at $18 to $25, and tried to mask the smaller wages by using customer tips to cover for the smaller hourly pay. The net effect was that the contract workers received smaller overall take-home pay.

The practice wasn’t disclosed to drivers but the Flex drivers noticed the compensation reductions and began to complain. Amazon stopped the practice in 2019, after it became aware of the FTC’s investigation, the agency said. The company settled without admitting wrongdoing.

The theft of millions of dollars worth of drivers’ tips is just one example of Amazon’s well-documented exploitation of workers as well as other anti-democratic actions. To put the corporation’s predatory practices in perspective, Weissman noted that “since the start of the pandemic, Jeff Bezos’ wealth increased by more than 1,000 times the total Amazon wrongly denied to its delivery workers.”

“How greedy can Amazon and Bezos get?” he asked.

“As important as this FTC action is,” Weissman continued, “it should compel us to look at the bigger picture. Amazon is, literally, out of control. Given its size and market dominance, the company increasingly functions as an essential service to consumers and businesses. Yet it is free from the sorts of restraints that are imposed on utilities or even financial service providers.”

Weissman added that “as much as we need the government to penalize Amazon for the kinds of abuses highlighted [Tuesday], we also need much more far-reaching anti-monopoly and regulatory solutions.”

Could there be an opening to rein in the world’s most powerful corporation as well as the $200 billion man behind it?

In what journalist Paris Marx described as an attempt to “rehabilitate a tarnished image,” Bezos on Tuesday announced in an email to employees that he will be stepping down as Amazon CEO during the third quarter of 2021, to be replaced by Amazon Web Services CEO Andy Jassy. Bezos will become the executive chair of Amazon’s board.

The announcement came as the e-commerce giant reported record-high sales of $125.5 billion and net income of $7.2 billion in the fourth quarter of last year.

The 2020 holiday period “marked the first time Amazon reported more than $100 billion in quarterly revenue,” the Wall Street Journal noted. “Few companies have seen growth take off like Amazon during the global health crisis. The explosion in online shopping vaulted the company’s sales to record figures as the e-commerce sector grew by around 50% throughout last year, according to some analysts.”

Bezos’ announcement also coincided with an ongoing push by workers at an Amazon warehouse in Bessemer, Alabama to unionize, an effort the company is vigorously resisiting.

In an interview with Democracy Now!‘s Amy Goodman on Wednesday, Weissman said that “there’s no reason to think anything is going to change at Amazon because Bezos is taking this new role.”

A number of commentators have pointed out that Bezos isn’t exactly leaving and that in fact, the move could make him “even more powerful” and less accountable, as former labor secretary Robert Reich asserted.

“The move isn’t an exit, or a demotion,” VICE journalist Edward Ongweso wrote on Tuesday. “Instead… Bezos will still effectively be the head of the company and the new CEO’s boss while taking a step back from day-to-day operations as well as the critical eye of the media.”

Nevertheless, Weissman also called Bezos’ “departure as CEO… a chance for Amazon to turn over a new leaf.”

“It should start,” he said, “by paying all its workers a living wage and ensuring they have safe and healthy working conditions—and also must end practices of squeezing small businesses and manipulating consumers.”

Speaking with Goodman, Weissman acknowledged that Amazon is highly unlikely to “rethink its predatory business model” on its own. What needs to happen instead, he said, “is for the government to step in and take much more serious action than it’s ever really contemplated to restrain, control, and ultimately break up Amazon.”

Bezos’ transition “should be an inflection point for the U.S. government,” said Weissman. “We can’t rely on Amazon to reform itself. Amazon should be broken up and its business model refashioned.”

“We can’t have fairness in the economy, or in our democracy,” he added, “with this much concentrated power.”