Amazon has reached a settlement with the District of Columbia to resolve a lawsuit alleging slower delivery times in the city’s low-income neighborhoods. The legal action, filed in 2024 by Attorney General Brian Schwalb, claimed that Amazon excluded two ZIP codes—covering historically disadvantaged areas—from its Prime in-house delivery services without notifying customers, a practice said to violate consumer protection laws.

According to the terms of the agreement announced Thursday, Amazon will refund approximately $7.25 million in Prime membership fees to affected customers and pay a $1 million penalty to the district. Additionally, the company agreed to inform customers in the District of Columbia about any future delivery restrictions. The attorney general’s office stated that around 69,000 Prime members experienced slower deliveries due to Amazon’s practices.

“Amazon deceived thousands of its customers,” Schwalb said, emphasizing the intent to return funds to those impacted by the delivery disparities. The lawsuit centered on allegations that Amazon’s delivery network created unequal service levels based on ZIP code demographics.

In response, Amazon spokesperson Steve Kelly denied any wrongdoing or deception, noting that the settlement does not constitute an admission of fault. Kelly characterized the decision to settle as an effort to avoid extended litigation and maintain focus on providing service to customers across Washington, D.C.

This settlement highlights growing scrutiny of major e-commerce and logistics companies over equitable service provision amid increasing reliance on fast delivery as a consumer expectation. Authorities continue to examine how delivery algorithms and service strategies may inadvertently or intentionally affect underserved communities.