New Jersey Targets Amazon Over Labor Market Control in Delivery Network

The Complaint

New Jersey Attorney General Jennifer Davenport filed an antitrust action against Amazon this week, marking the first time a state has pursued monopsony conduct allegations against a major tech platform. The complaint centers on Amazon's Delivery Service Partner program, launched in 2018, and alleges the company wields disproportionate control over the labor market for last-mile delivery services.

At DailyTechWire, we've tracked the evolution of gig-economy labor models across Asia and North America for years. What distinguishes this case is not simply that Amazon sets terms with contractors, a standard practice in platform logistics, but the allegation that it operates as the sole meaningful buyer of delivery labor in specific markets, effectively dictating compensation and working conditions without competitive pressure.

According to Davenport's office, Amazon functions as a monopsonist in the delivery contractor space: a dominant buyer that can unilaterally set payment terms for services it requires. The complaint argues this market structure results in systematically lower wages and deteriorating conditions for drivers in New Jersey and potentially nationwide.

How the DSP Program Works

Amazon positions its Delivery Service Partner network as a collection of independent small businesses. Contractors own their operations, hire drivers, and manage day-to-day logistics. In theory, this structure insulates Amazon from direct employment liability while scaling delivery capacity rapidly.

The reality, the complaint contends, looks different. While DSPs are legally independent, Amazon supplies the packages, the routes, the branded vehicles, and even the uniforms drivers wear. The company monitors performance through in-vehicle cameras, AI-driven analytics, and route optimization software that leaves little room for contractor discretion.

Davenport's office alleges Amazon has used drone surveillance to monitor workers planning to strike or organize. The complaint also claims that drivers who supported unionization efforts at one Amazon facility were subsequently rejected or terminated when they applied to work for other DSPs within the same network, suggesting coordination or shared blacklisting practices.

This level of operational control raises a question we've seen surface repeatedly in platform-labor disputes across Southeast Asia and Latin America: at what point does a contractor model become a de facto employment relationship with none of the legal protections?

Wage Suppression and Market Power

The crux of the antitrust argument is economic. Because DSPs depend almost entirely on Amazon for business, and because drivers have limited alternatives within the network, Amazon can suppress wages below competitive levels. The complaint asserts that DSP drivers earn significantly less than their counterparts at the US Postal Service, UPS, and FedEx, even though the work is comparable.

This wage gap is not incidental. In a competitive labor market, contractors would bid up pay to attract drivers. But if Amazon is the only buyer, and if switching costs for DSPs are prohibitively high, market forces break down. The complaint argues that Amazon exploits this dynamic, extracting surplus value from labor without facing the discipline of competition.

The allegation resonates with broader debates about platform power in two-sided markets. Ride-hailing, food delivery, and logistics platforms across Asia have faced similar scrutiny, whether from regulators in Seoul examining algorithmic wage-setting or labor ministries in Jakarta pushing for minimum earnings floors. New Jersey's approach is novel in framing the issue explicitly as buyer-side monopoly power rather than employment misclassification.

Amazon's Defense

Amazon disputes the characterization outright. A company spokesperson told media that DSPs are genuine independent operators who make their own decisions about hiring, fleet management, and capacity. The spokesperson emphasized that DSPs can work with other companies and that drivers are free to choose their employer and organize if they wish.

Amazon also pushed back on claims about route planning, asserting that the vast majority of routes finish on time or early, built on real-world data that accounts for traffic, geography, and stop complexity. The company criticized the attorney general for not raising the central claims before filing suit, calling the move a preference for publicity over dialogue.

This defense hinges on a legal distinction: independence in form versus control in substance. Amazon maintains the DSPs are autonomous businesses. The state argues that autonomy is illusory when Amazon dictates nearly every operational detail and serves as the sole revenue source.

The case will likely turn on how courts weigh contractual independence against functional control, and whether Amazon's market share in delivery labor constitutes monopsony power under antitrust law.

Precedent and Implications

New Jersey's complaint is the first of its kind at the state level, but it builds on a growing body of antitrust theory focused on labor markets. Federal enforcers have scrutinized no-poach agreements and wage-fixing among employers, but buyer-side power in gig and contractor networks remains relatively unexplored legal terrain.

If the case succeeds, it could open a new front in platform regulation. Other states may follow with similar actions, and companies operating contractor networks in logistics, ride-hailing, and delivery could face heightened scrutiny over wage-setting practices and restrictions on worker mobility.

Amazon has faced legal challenges over driver programs before. The FTC investigated the company's Flex program over $61.7 million in stolen tips, leading to a settlement in which Amazon paid that amount directly to drivers. But that case involved consumer protection law, not antitrust.

The monopsony framing is significant because it shifts the conversation from worker classification to market structure. Even if drivers remain contractors under labor law, Amazon could still face liability if it is found to suppress wages through market power.

What Comes Next

The case will unfold in New Jersey courts over the coming months. Discovery will likely focus on Amazon's contracts with DSPs, internal communications about pricing and labor practices, and economic analysis of wage levels and market concentration.

For Amazon, the stakes extend beyond New Jersey. The DSP program is central to the company's logistics strategy, enabling rapid delivery without the overhead of a unionized workforce. A ruling that forces Amazon to loosen control or raise compensation could ripple across its entire delivery network.

For labor advocates and antitrust scholars, the case represents a test of whether existing legal frameworks can address power imbalances in platform labor markets. Traditional antitrust focuses on consumer harm, prices, and output. Monopsony theory extends that lens to workers, asking whether dominant buyers can suppress wages the way dominant sellers can inflate prices.

The outcome will matter not just for Amazon's delivery drivers in New Jersey, but for millions of gig workers across the United States and beyond who operate in markets where a single platform sets the terms.