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Attorneys General and Consumer Advocates Warn Amazon, Others of Price-Gouging

The COVID-19 crisis has raised concerns of price-gouging, as consumers rush to buy emergency supplies and groceries, and businesses capitalize on heightened demand by increasing prices. Amazon, one of the largest online retailers and platforms for businesses to sell goods, recently received a letter from 33 state attorneys general asking the company to take steps to prevent price-gouging.[1] Such steps include proactively setting policies against price-gouging for businesses seeking to sell goods on the platform and then enforcing those policies.[2] The letter also calls on the retailer to set up mechanisms for consumers to report sellers for price-gouging.[3]

A consumer advocacy group, U.S. PIRG Education Fund, reported that it used price-tracking software to review prices on Amazon for the highest-ranking search results in the weeks following World Health Organization’s (WHO) declaration of the COVID-19 pandemic on January 30.[4] It found some disturbing results, including price surges of 166% on average for face masks compared with the proceeding three-month period.[5]

Amazon now reports that it is “actively collaborating with attorneys general in more than ten states, and with numerous federal prosecutors, as they work to investigate and prosecute alleged price gougers.”[6] It has further stated that it has already removed “well over half a million of offers from our stores due to coronavirus-based price gouging” and “suspended more than 3,900 selling accounts” in its U.S. store for violating Amazon’s pricing policies.[6]

As consumer advocacy groups, state attorneys general, and others work to uncover price-gouging and other illegal acts by entities seeking to capitalize on these difficult times, there is certain to be more enforcement of price-gouging laws and other consumer protection statutes.[8]

Footnotes

[1] https://www.attorneygeneral.gov/wp-content/uploads/2020/03/Amazon.pdf

[2] Id.

[3] Id.

[4] https://www.cbsnews.com/news/coronavirus-amazon-lysol-price-gouging/

[5] Id.

[6] https://blog.aboutamazon.com/company-news/price-gouging-has-no-place-in-our-stores

[7] Id.

[8] https://www.hausfeld.com/perspectives/price-gouging-concerns-raised-during-covid-19-crisis  

Related Lawyers: Samantha Stein
Related Practice Areas: Deceptive Business Practices and Consumer Protection

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