Amazon Delivery Service Partners Face High Repair Bills Amid Aging Van Fleet

Amazon delivery service partners face high repair bills of $20,000 or more for aging vans, with some firms reporting bills 10 times higher than estimated costs. The company is investigating the issue and has acknowledged erroneous charges, such as a $569 "VIN fee". Delivery partners are canceling permission for leasing companies to withdraw funds to protect themselves from overcharging. Amazon is urging partners to submit disputes by September.

A federal judge in Seattle has certified a class action lawsuit against Amazon.com Inc. (AMZN) on behalf of approximately 300 million U.S. consumers. The lawsuit alleges that Amazon uses anti-competitive practices to inflate prices across its marketplace. The certification, granted by U.S. District Judge John Chun on August 6, 2023, allows the lawsuit to proceed on behalf of consumers who purchased five or more new, physical goods from third-party sellers on Amazon's marketplace since May 26, 2017.

The lawsuit centers on Amazon's alleged anti-discounting policies, which prevent third-party sellers from offering lower prices on competing platforms. These policies include the Price Parity Clause (removed in 2019), the Select Competitor Featured Offer Disqualification program, and the Marketplace Fair Pricing Provision. Plaintiffs allege that Amazon monitors prices across more than 200 competitor websites and removes sellers from the critical "Buy Box" feature if their products are priced even one cent lower elsewhere.

The court found that Amazon controls approximately 72% of the Online Retail Marketplaces Market, with about 2.3 million active third-party sellers—45 times more than Walmart Inc. (WMT) marketplace. Internal Amazon documents revealed the company recorded millions of enforcement incidents between 2018-2023, with seller compliance rates around 80%. Evidence showed competing platforms like Jet.com ultimately failed partly due to Amazon’s pricing enforcement, with Jet.com shuttering in 2020 after Walmart’s acquisition.

The lawsuit alleges that Amazon’s referral fees, typically around 15% of transaction value, are artificially inflated due to reduced competition. With approximately 34 billion third-party transactions affected during the class period, potential damages could reach billions of dollars.

Reference List:
[1] https://www.benzinga.com/markets/equities/25/09/47465515/amazon-hit-with-class-action-covering-300-million-shoppers-over-alleged-price-inflating-policies