Amazon sued for ending free Whole Foods delivery as Prime benefit

Inside a Whole Foods Market near Amazon’s Seattle headquarters after the tech giant’s 2017 acquisition of the grocery chain. (GeekWire File Photo / Taylor Soper)

A proposed class action lawsuit alleges that Amazon breached its contract with Prime members last year when it stopped offering free two-hour delivery on Whole Foods purchases of $35 or more.

The case, filed Tuesday in U.S. District Court in Seattle, names as plaintiffs two California residents who say the Whole Foods delivery benefit was a major motivation for signing up as Prime members.

Amazon, which acquired the grocery chain for $13.7 billion in August 2017, started rolling out free Whole Foods grocery delivery for Prime members in February 2018, before implementing a $9.95 surcharge in September 2021.

The surcharge came after demand for grocery delivery soared during the pandemic. The economics of grocery delivery are notoriously difficult, and Amazon has made regular changes in its Amazon Fresh delivery fees and business models over the years in an attempt to create a viable business.

“Hundreds of thousands, if not millions, of Amazon Prime members paid for a membership because they wanted to take advantage of Prime’s free Whole Foods delivery service,” the suit alleges. “As a result of Amazon’s unfair business practices, consumers paid $119 for a service that was unfairly terminated.”

We’ve contacted Amazon for comment on the lawsuit.

The suit says Whole Foods delivery customers who ended their Prime memberships after Amazon instituted the surcharge were unable to receive full or partial refunds under Amazon’s Prime cancellation policy.

Seeking unspecified financial damages, the complaint alleges violations of the Washington State Consumer Protection Act, breach of contract, breach of the duty of good faith and fair dealing, and unjust enrichment.

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Amazon raised the annual price of Prime from $99 to $119 in June 2018 and to $139 in March of this year, citing higher costs and increased benefits of the subscription for Prime members.

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