Washington, D.C. – The District’s Attorney General, Brian L. Schwalb, announced Wednesday that Amazon will pay a total of $8.25 million to resolve a lawsuit alleging the retailer shortchanged Prime members in the predominantly Black neighborhoods east of the Anacostia River.
Settlement details
The consent order requires Amazon to place $7.25 million into a fund for eligible Prime members who lived in ZIP codes 20019 and 20020 between June 9, 2022, and April 5, 2026. The Attorney General’s Office will allocate the money equally among the more than 69,000 qualifying customers, with the remaining $1 million serving as a civil penalty to the District.
Eligible residents will receive notices explaining how to claim their share, either electronically or by check. The order also mandates at least five follow‑up notices for anyone who does not respond initially. Any undistributed funds will be transferred to the Attorney General’s Restitution Fund.
What prompted the lawsuit
In June 2022, Amazon stopped using its own delivery network for the two ZIP codes and relied on UPS and the U.S. Postal Service for last‑mile deliveries. The District alleged that Amazon knew these carriers often resulted in slower service but failed to inform customers that their neighborhoods had been excluded from full Prime benefits.
Before the exclusion, more than 73 % of packages to 20019 and more than 72 % to 20020 arrived within two days of checkout in 2021. By 2023, those on‑time rates had fallen to 25.11 % and 23.64 % respectively, while the overall two‑day delivery rate for the District rose from 66.66 % in 2021 to 74.33 % in 2023.
Attorney General’s response
Schwalb said 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.” He added that the settlement “puts more than $7 million back in the pockets of people who were taken advantage of.”
The Attorney General’s office emphasized that no company is above the law, regardless of size or influence, and pledged to continue enforcing fair treatment for all D.C. residents.
Amazon’s position
In the settlement filing, Amazon stated it denies the District’s allegations and admits no wrongdoing. The company confirmed that it ended the delivery exclusions by April 5, 2026.
Future safeguards
The consent order also limits Amazon’s ability to make similar ZIP‑code‑wide delivery decisions for the next four years. If the company ever excludes an entire residential ZIP code for safety reasons, it must inform existing Prime members of the potential impact on delivery speed or other benefits. Prospective customers entering an affected address during sign‑up must receive the same disclosure, and Amazon must notify the Attorney General’s Office of any such changes.
These provisions address the District’s core argument: a company cannot reduce service across entire neighborhoods, continue charging the same membership price, and keep the decision hidden from residents.
Community impact
Residents of Wards 7 and 8 rely heavily on fast delivery because many live in areas with fewer nearby retail options. Quick access to goods that cannot be purchased locally is especially important for families and seniors who depend on timely shipments.
Social‑media reactions to the settlement were largely supportive. One commenter wrote, “This is good! Amazon has a local facility and it’s shameful how they are treating paying customers.” Schwalb concluded, “My office will always fight to make sure businesses compete on a level playing field and treat their customers fairly so that D.C. residents get what they pay for, regardless of what zip code they live in.”
Original reporting: The Washington Informer — read the source article.
