FTC targets ‘unfair, deceptive, and anti-competitive practices’ in gig economy • TechCrunch

The Federal Trade Commission is reviewing the complex and potentially unfair economics and policies of the gig economy for “deceptive, unfair, and otherwise illegal acts and practices.” Whether it’s forced arbitration, labor misclassification, or algorithmic wage and job allocation, the agency says it will pursue all questionable tactics that harm workers.

To be clear, a “policy statement” like the one released today is not a new regulation or new law. That’s what it sounds like, but you might think of it more as a statement of priorities. The FTC has been aware of and opposed to unfair labor practices in the gig economy for years – the era of exploitation (as with so many things) was even before the pandemic.

But today’s circumstances and the particular pro-union interests of this administration, and of FTC Chairwoman Lina Khan, mean she’s kicked the old to-do list up a few notches. (I asked the FTC for a little more info on how they might put it and will update their post if they get back to me.)

The policy statement itself, which you can download here, is a very simple enumeration of the various pros, cons and real disadvantages involved in the gig economy. It’s only 17 pages and very readable (it’s not a legal document, even though it has lots of footnotes), but I’ll just summarize the main complaints here:

  • Control without liability: Roles are often defined to maximize worker risk and minimize employer liability or expense.
  • Reduced bargaining power: A lack of transparency, a decentralized work environment and waivers of legal remedies 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.
  • Misleading or unfair pay practices: Misleading statements about wage structures and policies can lure workers into false pretenses or prevent accurate comparisons between opportunities.
  • Undisclosed costs or working conditions: Costs and expenses associated with work are often elided or minimized, which inflates the apparent take-home pay.
  • Unfair or deceptive practices of an automated boss: Automated work distribution and pervasive surveillance can be deceptive or manipulative, changing wages, ratings, or giving employers the ability to evict undesirable workers.
  • Unfair contract terms and mobility restrictions: Contracts are almost never negotiable, often prohibiting workers from bringing in competitors, speaking out or suing.
  • Wage setting and coordination: Gig economy practices can deliberately—or as an effect of shared market power—lead to wage-fixing, benefit-cutting, and other coordinated anti-worker behavior among employers.
  • Consolidation and monopolization of the market: Reduced competition can lead to monopolies, monopsonies, predatory pricing, etc., in violation of antitrust laws.

The FTC doesn’t name names, although a few appear in the footnotes, but it’s hard not to think of certain service providers when you read about things like deceptive compensation practices. How many times over the past few years have we seen wage theft, suppression of employee complaints, cover-ups of crimes, etc., by corporations in the billion-dollar on-demand economy?

A recent example, Commissioner Rebecca Slaughter notes in a statement accompanying the policy:

In 2021, we filed a lawsuit against Amazon for allegedly retaining a portion of drivers’ tips. As alleged in the complaint, Amazon actively covered up its conduct and only stopped after learning of the FTC’s investigation. The FTC has recovered more than $60 million from Amazon to reimburse the more than 140,000 Amazon Flex drivers whose tips were withheld.

Amazon, exploiting (allegedly) its lowest tier of workers? Shocking! (Here are some additional details.)

It’s doubtful that any of these “honest mistakes” or “accounting bugs,” as they were no doubt shot at the time, would have led to a significant charge or settlement. Unfortunately, due to the way these companies keep their policies and data confidential, there’s rarely much anyone can do beyond publicly shaming them to the point where consumer disgust outweighs their desire for delivery. ‘grocery.

Nonetheless, the FTC “will address this damage through strong law enforcement, community outreach, and new initiatives to better understand and address the impact of emerging technologies in the gig economy and elsewhere.” on historically underserved communities”. He also just formalized a new partnership with the National Labor Relations Board, so this is an interagency effort.

Can you help ? Why, yes you can: The next time you see a weird practice, like “your tip was rounded up and the rest added to our slush fund!” you should report it here. The FTC is a reactive agency – its mission is to investigate complaints, and the more complaints it has in any given area of ​​the industry, the better the record it has when it walks into the lobby of the Department of Justice. is big.

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