FTC sets its sights on ‘unfair, deceptive, and anticompetitive practices’ in gig economy

The Federal Trade Commission is looking into the complex and potentially unfair economics and policies of the gig economy. The agency will go after any questionable tactics that hurt workers.

A statement of policy is not a new rule or law. You might think of it as a statement of priorities. The FTC has worked against unfair labor practices in the gig economy for a long time.

It has climbed up the old to-do list because of the circumstances and the pro-labor interests of this administration. If the FTC gets back to me, I will update his post with more information.

There are various pros and cons of the gig economy in the policy statement. This isn't a legal document, but it's 17 pages and very readable, and I'll just bullet the main complaints here.

• Control without responsibility: Roles are often defined to maximize risk on the worker and minimize responsibilities or expenses by the employer.
• Diminished bargaining power: A lack of transparency, a decentralized work environment, and legal recourse waivers limit the ability of workers to take action against employers.
• Concentrated markets: Network effects and subsidized costs can stifle competition and lock workers into a handful of platforms.
• Deceptive or unfair pay practices: Misleading claims about pay structures and policies may lure workers under false pretenses or prevent accurate comparisons between opportunities.
• Undisclosed costs or terms of work: Fees and expenses associated with the work are frequently elided or downplayed, inflating apparent net pay.
• Unfair or deceptive practices by an automated boss: Automated distribution of work and pervasive surveillance can be misleading or manipulative, changing pay, ratings, or giving employers opportunities to push out unwanted workers.
• Unfair contractual terms and restrictions on mobility: Contracts are hardly ever negotiable, often barring workers from using competitors, speaking out, or suing.
• Wage-fixing and coordination: Gig economy practices may purposely — or as an effect of shared market power — lead to wage fixing, benefit reduction, and other coordinated anti-worker behavior across employers.
• Market consolidation and monopolization: Lessened competition may lead to monopolies, monopsonies, predatory pricing, and so on, in violation of antitrust laws.

When you read about deceptive pay practices, it's hard not to think of certain service providers. Wage theft, suppression of employee complaints, coverups of crimes, and so on have been seen by billion-dollar gig economy companies over the last few years.

Commissioner Slaughter notes in a statement that one recent example.

In 2021, we brought suit against Amazon for allegedly keeping a portion of drivers’ tips. As alleged in the complaint, Amazon actively concealed its conduct and only stopped after becoming aware of the FTC’s investigation. The FTC recovered over $60 million from Amazon to pay back the more than 140,000 Amazon Flex drivers whose tips were withheld.

Amazon is alleged to be exploiting their lowest tier of workers. There are more details here.

Amazon to pay $61.7M to settle FTC complaint over stolen Amazon Flex driver tips

It is unlikely that one of those "accounting bugs" would have led to a large charge or settlement. Due to the way these companies keep their policies and data proprietary, there isn't much anyone can do other than publicly shame them.

The FTC will address any harms through robust law enforcement, community outreach, and new initiatives to better understand and address the impact of emerging technologies. The new partnership with the National Labor Relations Board is a cross agency effort.

Are you able to assist? You should report it if you see something like "your tip has been rounded down and the remainder added to our slush fund!" The FTC's mission is to investigate complaints, and the more it has in a given industry, the bigger the folder it has in the Justice Department lobby.

FTC challenges consolidation in tech with review of merger guidelines