WASHINGTON, D.C. — Amazon will pay $8.25 million to settle a lawsuit with the District of Columbia over Prime delivery practices. The settlement resolves allegations that the company excluded specific neighborhoods from its in-house delivery services while charging full subscription fees.

The agreement includes $7.25 million in refunds to customers and $1 million in penalties paid to the District of Columbia. Impacted District residents will receive refunds equal to nearly half of the total membership fee they paid from June 2022 to April 2026.

The lawsuit alleged Prime deliveries were significantly slower east of the Anacostia River in ZIP codes 20019 and 20020. Approximately 69,000 Prime members living in these ZIP codes experienced significantly slower delivery times than neighbors in other D.C. ZIP codes despite paying the same price for Prime membership.

"No company is above the law, no matter how big or powerful. My office will always fight to make sure businesses compete on a level playing field and treat their customers fairly so that DC residents get what they pay for, regardless of what zip code they live in." Schwalb said.

According to the Bureau of the Census American Community Survey (ACS), ZIP code 20019 had a median household income below the D.C. average, and ZIP code 20020 also had a median household income below the D.C. average.

Amazon stated it was always transparent with customers about delivery times and rejected claims that its practices were deceptive. The company stated the settlement is not an admission of wrongdoing.

It stopped using its trucks to make Prime deliveries east of the Anacostia River during the relevant period for safety reasons. "In the zip codes at issue, drivers faced specific, documented safety threats, and we adjusted operations to protect them, while still supporting delivery through other carriers. Since this time, conditions have improved," an Amazon representative said.

It wanted to avoid prolonged litigation to focus on its delivery services. Under the settlement agreement, Amazon must notify customers about any delivery exclusions in D.C. ZIP codes.

Amazon must notify existing customers and prospective customers who enter an affected address during the signup process of any expedited delivery exclusions. Eligible customers will be notified in the coming weeks and told the amount of their refund.

Why It Matters

In 2024, the D.C. OAG filed a similar lawsuit against Amazon for excluding ZIP codes 20019 and 20020 from its in-house delivery services, which led to the $8.25 million settlement in 2026. The D.C. Office of the Attorney General stated companies must inform customers of any adverse impacts operational changes will have on the quality of service so consumers can make informed purchasing decisions.

Timeline

On January 5, 2001, a Revised Specification Pursuant to the Personal Responsibility and Work Opportunity Reconciliation Act was issued. This document contains an Order of the Attorney General issued pursuant to sections of the Act.

On January 1, 2024, the lawsuit accused Amazon of excluding certain parts of the District from Prime delivery services. On the same date, the D.C. Office of the Attorney General filed suit against Amazon in 2024.

What's New

Additional reporting indicates the Office of the Attorney General (OAG) of the District of Columbia has a history of enforcing consumer protection laws, including a $15 million settlement with Facebook in 2023 over data privacy violations. The D.C. Office of the Attorney General stated Amazon violated D.C. consumer protection law by secretly excluding two D.C. ZIP codes east of the Anacostia River from Amazon’s in-house, Amazon-branded delivery services.

The D.C. Office of the Attorney General stated it has secured almost $80 million on behalf of D.C. consumers since January 2023. Under a revised order from the FTC's Amazon Prime settlement, more consumers will qualify for refunds with the maximum payment increased.