Activists Drop Kozmo Bias Claims

The Equal Rights Center said the initiative and the company's expansion of its service areas were key factors in the decision to drop the case they initially filed in April.

"Based on our discussions with Kozmo executives and our review of the evidence, we concluded that the definition of Kozmo's initial service area was not motivated by racial discrimination," said Equal Rights Center executive director David Berenbaum.

Bias Claims

The lawsuit alleged that the New York City-based Kozmo, which delivers food and videos in 11 U.S. cities, was intentionally refusing to serve predominantly minority neighborhoods in the D.C. area. The suit came two days after an MSNBC report stating that although the Washington, D.C. population is 66 percent African-American, the neighborhoods served by Kozmo are 65 percent white and 25 percent African-American, while the areas denied service are 86 percent African-American.

Kozmo, which had steadfastly denied the accusations, agreed with Berenbaum's assessment. Kozmo communications director Stephanie Cohen Glass told the E-Commerce Times that its service areas "are based on a number of factors, not discrimination."

In Tuesday's announcement, Glass said that the Equal Rights Center "came to the same conclusion that we've maintained all along."

Divide Closers

In a joint statement, the parties said that their goal is to "work toward assuring full and equal access to the digital marketplace," with Kozmo contributing US$125,000 to the initiative. The Equal Rights Center will handle details of the effort, which is now in the preliminary planning stages.

"Kozmo is committed to helping underserved communities access the Internet and we're looking forward to working with the Equal Rights Center to bridge the digital divide in Washington, D.C.," said Kozmo chief executive officer Gerry Burdo.

Berenbaum also noted that widespread Net access would help ensure that entire communities do not fall behind the technological curve.

"As in many cities in the country, the Internet is not living up to its promise as the great equalizer because many of the residents of historically underserved communities are unable to get access to the Internet," he said.

Case Dismissed

Tuesday's announcement was a marked turnaround for both Kozmo and the Equal Rights Center.

Shortly after filing suit, the group hailed the case as a watershed legal action, saying it was the first civil rights case brought against an Internet company. The group also said the case highlighted the untapped purchasing power of minority communities.

However, in September, the court dismissed the case with the plaintiffs' consent, after denying their request to extend scheduling deadlines. At the time, the activists announced plans to re-file the case in Washington D.C. Superior Court.

For its part, Kozmo maintained that its delivery areas were not drawn to exclude minorities, but rather that it decided to serve neighborhoods in which there was a high Internet penetration and usage rate. The company also said that the court's dismissal of the civil rights case indicated that there was no evidence of racial bias. According to Kozmo, the activists were not able to prove their claims within the time allowed.

Even so, Glass said the company continued to speak with the Equal Rights Center after the case's dismissal about "erasing the digital divide not only in Washington, D.C. but elsewhere."

The new agreement between the two parties brings an end to the legal challenges.