Report from Reuters
In Brief – Amazon’s Italian logistics business unit has resolved a major investigation brought by the Milan public prosecutor’s office into alleged tax evasion and unlawful labor practices by paying roughly €180 million ($210 million) to Italy’s tax agency and abandoning a driver-monitoring system. The probe, initiated in 2024, accused Amazon of relying on small delivery businesses to supply delivery workers in ways that allowed Amazon to circumvent labor obligations, reduce social security contributions, and avoid paying value-added tax. Authorities initially seized €121 million as part of the inquiry. Italian officials indicate that Amazon now joins approximately 30 other companies that have settled similar investigations over the past two years, with collective settlements exceeding €1 billion. In a statement, Amazon said it had clarified its practices with regulators and claimed that its work to address concerns helped raise compliance standards across the broader delivery sector. The Milan prosecutor’s office has also scrutinized employment and contracting practices at other major delivery firms, including the Italian operations of DHL, FedEx, and UPS.
Context – Amazon has been one of the largest Gig work businesses for years. Two Gig-style platforms are central to Amazon’s delivery services. Delivery Service Partners are a fleet of small businesses that buy delivery vans and use Gig drivers to operate them, with the driver performance tightly guided by Amazon. When safety, health, and labor shortcomings occur, Amazon often pins the failings on the small firms. Amazon’s second Gig delivery program, called Flex, is an Uber-style app platform where drivers sign up directly and use their own vehicles. Both programs have faced criticism and challenges globally for worker misclassification, lax safety, and aggressive monitoring by Amazon. Although the EU’s Platform Labor Directive was initially intended to set uniform Gig worker employee classification standards, the final version left that in the hands of each member state, with some, including Spain and Portugal, going further than others.