DACO suing Amazon for discriminating against P.R. consumers
After failed attempts to convince online retailer Amazon to reinstate its free shipping option to Puerto Rico, the Consumer Affairs Department is preparing to file a lawsuit against the Seattle, WA-based company for discriminatory practices, News is my Business confirmed Tuesday.
The suit to be filed in coming weeks will claim Amazon is incurring in discriminatory practices against Puerto Rico by discontinuing the “Free Super Saver” shipping option, said José Miguel Talavera, director of the Anti-Discrimination Commercial Office of the consumer watchdog agency known as Daco.
“We sent a letter to Jeff Bezos, founder of Amazon, who handed it to one of his assistants who told us it was an error in programming and that it should not have been offered in Puerto Rico,” Talavera said. “This is clear discrimination, as they said for now, they will not be making any changes.”
The free shipping option on purchases of $25 or more had been available to Puerto Rico consumers for a decade, but was dropped in August when Amazon officials said it had only been available due to a “glitch in its computer system.”
Amazon’s policy has been to exclude U.S. territories, including Guam, the U.S. Virgin Islands, American Samoa, and the Marianas, from its money-saving benefit. Ironically, however, it extends free shipping to Hawaii, which although a state, is geographically farther away than Puerto Rico is from the U.S. mainland.
While Talavera would not disclose what the course of action would be to avoid revealing Daco’s strategy, he said the federal lawsuit will seek equal treatment for Puerto Rico. It could also open the door for a class-action suit by Amazon customers who have had to pay shipping fees after the option was dropped.
“There’s no reason to treat Puerto Rico differently. After 10 years of the system working fine, they chose to discontinue the offer,” Talavera said.
Amazon reported a drop in third-quarter profit Tuesday, with net income falling 73 percent to $63 million from the $231 million, on record for the same year-ago quarter. The company attributed the decrease to increased spending on new products such as the Kindle Fire tablet.
Anti-discrimination unit pursuing other retailers
Since being created by an administrative order in September, the Anti-Discrimination Commercial Office has contacted 250 stateside retailers and companies that refuse to ship to the island or include Puerto Rico in other activities, such as sweepstakes, Talavera said.
“We’ve contacted companies with and without local presence, asking them to justify the reasons why they don’t give local consumers equal treatment, to evaluate it,” Talavera said. “If they aren’t real reasons based on issues like excise tax costs, or federal or local regulations, we will move forward with imposing fines for violating the administrative order that created the division.”
He said the feedback from companies thus far has been positive, “and they say they’re looking for ways to comply with the order.”
“It is surprising to see the number of companies that operate in the U.S. mainland, from which local consumers buy, that do not ship and fail to treat us the same as they do Alaska and Hawaii,” he said. “They classify us as an international destination or sometimes fail to include us at all.”
Over the past seven weeks, the Anti-Discrimination Commercial Office has been orienting companies on Puerto Rico, “telling them we use the dollar, the same shipping services as the rest of the nation and that it represents a business opportunity for them to expand their operations,” Talavera said.