New Jersey’s attorney general has sued Amazon, accusing the company of unlawfully wielding power over delivery contractors and their workers. The antitrust lawsuit claims Amazon prevents Delivery Service Partner (DSP) drivers from unionizing and limits competition for labor among contractors in the network. The company’s “dominant buyer power” leads to “lower wages and worse working conditions” for “everyday workers in New Jersey — and likely across the country — who provide the delivery services Amazon demands,” the filing alleges.

AG Jennifer Davenport’s office says this is the first complaint of its kind, in that no state has filed a monopsony conduct complaint until now. It claims Amazon is a monopsonist, “a dominant buyer of specific goods or services that can control or dictate the terms of payment for the services it demands.” 

Amazon started the DSP program in 2018 to build out a delivery network with third-party contractors. It classifies DSPs as independent operators. However, Davenport’s office claims that, in addition to providing packages for delivery, Amazon gives drivers uniforms to wear, branded vans and their routes. It also accused Amazon of monitoring drivers using cameras, AI and other tech (including drone surveillance of some who planned to strike and attempted to unionize), as well as controlling DSPs’ hiring practices. The AG claimed, for instance, that “some workers who supported union organizing at an Amazon delivery station were later rejected or terminated by other DSPs in Amazon’s delivery network.”

According to the complaint, Amazon is the sole buyer of DSP services, leaving these contractors dependent on the company. The filing accuses Amazon of exercising “its power through the low compensation and poor conditions it imposes on both DSPs and DSP drivers” and claims the drivers “earn significantly less” than those working for the US Postal Service, UPS and FedEx.

“This complaint is not grounded in fact. The Attorney General’s characterization of the DSP Program and the claims about working conditions are just wrong. The truth is, DSPs are independent business owners who make their own decisions about hiring, fleet management, and capacity planning — and they choose whether to work with other companies besides Amazon,” Amazon spokesperson Steve Kelly told Engadget in a statement. “Had the Attorney General bothered to look at the facts, they would have also seen that the vast majority of routes are finished on-time or early — built on real-world data accounting for stop complexity, traffic and geography. DSPs manage their drivers’ workday and route execution, and DSP employees are free to choose their employer and associate with who they want, full stop.

“Despite our cooperation, the Attorney General’s office did not raise the central claims in this complaint with us before filing suit,’ Kelly added. “They chose a press conference over a conversation or real effort to understand the truth, but we’re confident the facts will speak for themselves in court.”

This is not the first time Amazon’s driver programs have been the subject of legal action. The company’s internal driver contractor program — Flex — was the target of an FTC investigation over $61.7 million in stolen tips. Amazon eventually settled with the regulator for that exact amount, which was then paid out to drivers directly.