New Jersey’s Attorney General Jennifer Davenport filed a federal antitrust lawsuit on Tuesday against Amazon, alleging the company unlawfully wielded its dominant market position to suppress wages and working conditions for delivery drivers in its Delivery Service Partner (DSP) program. The complaint, filed in the U.S. District Court for the District of New Jersey, marks the first state-level accusation of a company unlawfully preserving a monopsony—a market condition where a single dominant buyer dictates terms to suppliers with limited alternatives.
Amazon’s DSP program, launched in 2018, relies on thousands of small contracted businesses to handle last-mile delivery for the retailer. These contractors deliver approximately 20 million Amazon packages daily worldwide, according to the company. The state alleges that Amazon’s control over packages, routes, vehicles, and infrastructure leaves contractors with little bargaining power to improve driver pay or conditions.
The lawsuit further claims that Amazon enforces a "no-poach" policy, restricting contractors from hiring drivers employed by other companies in its network. This policy, the state argues, reduces worker mobility and suppresses wage competition. Additionally, the complaint cites instances where drivers who supported union organizing at an Amazon delivery station faced rejection or termination by other contractors in New Jersey and New York.
Part 1: Immediate Action & Core Facts
Amazon is accused of holding monopsony power over its Delivery Service Partner (DSP) program, which employs thousands of contracted drivers. The state alleges this power allows Amazon to dictate wages and working conditions while restricting contractor autonomy. The lawsuit is the first state-level accusation of a company unlawfully preserving a monopsony.
Part 2: Deeper Dive & Context
State’s Allegations and Legal Basis
New Jersey’s complaint centers on Amazon’s alleged ability to suppress wages and working conditions by leveraging its dominant position in the delivery logistics market. The state argues that contractors in the DSP program have few practical alternatives to Amazon’s infrastructure and package volume, leaving them unable to negotiate better terms for drivers. The "no-poach" policy is cited as a mechanism to limit worker mobility and wage competition.
The lawsuit also highlights concerns over union organizing efforts, stating that drivers who supported unionization at one delivery station faced adverse actions from other contractors in the network. These actions, according to the complaint, include rejection or termination of employment.
Amazon’s Defense and Program Structure
Amazon describes its DSP program as a network of independent small businesses that operate with full control over their operations. The company states that contractors hire their own drivers, set wages, and manage daily logistics. Amazon has not yet publicly responded to the lawsuit, and representatives did not provide comment at the time of reporting.
The DSP model has enabled Amazon to reduce reliance on major carriers such as UPS and FedEx while accelerating delivery speeds. However, the program has faced increasing scrutiny from lawmakers, regulators, and labor advocates, who argue that Amazon exerts significant control over contractors’ operations despite their nominal independence.
Policy and Regulatory Context
The lawsuit reflects broader regulatory and legislative scrutiny of Amazon’s labor practices and market dominance. In New York City, proposed legislation would require Amazon to employ DSPs directly, a change the company has warned could lead to higher shipping costs for consumers and potential relocation of delivery operations outside the city. A tech industry group has also cautioned that such measures could disrupt the current delivery model.
Potential Implications
If successful, the lawsuit could set a precedent for other states to challenge Amazon’s labor and market practices. Legal experts note that proving a monopsony under antitrust law remains challenging, as courts typically require evidence of harm to competition rather than just market dominance. The case may also influence ongoing federal antitrust investigations into Amazon’s business practices.
Background: Amazon’s Delivery Service Partner Program
Launched in 2018, the DSP program recruits entrepreneurs to establish small businesses that hire drivers and deliver packages exclusively for Amazon. These contractors operate under Amazon’s logistics framework, including package volume, route assignments, and vehicle requirements. The program has expanded Amazon’s delivery capacity while maintaining a network of independent entities, though critics argue the independence is largely nominal.
The program’s growth has coincided with increased scrutiny of Amazon’s labor practices, particularly regarding wages, working conditions, and worker organizing rights. Labor advocates have long argued that the DSP model allows Amazon to avoid direct employer responsibilities while exerting significant control over contractors’ operations.