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‘Stop Price Gouging,’ 34 Attorneys General Tell Amazon, Walmart, Others

Published on March 25th, 2020

Online platforms have “an ethical obligation” to root out price gouging on hand sanitizer and other high-demand products during the coronavirus pandemic and beyond, top law enforcement officials from across the country say.

In letters to AmazonWalmarteBayFacebook and Craigslist on Wednesday, 34 attorneys general say these companies’ efforts to crack down on overpriced items on their selling platforms have so far “failed to remove unconscionably priced critical supplies.”

The officials are calling on the companies to create policies that look at prices historically to detect surges, set up a portal for shoppers to report pricing complaints and proactively monitor and respond to spiking prices at all times and not just during emergencies.

“These are just a few potential solutions, and we hope your company will put its considerable technological prowess to work … to better protect your customers,” the attorneys general wrote in letters to the companies.

“We believe you have an ethical obligation and duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real-time,” they added.

Shoppers have filed hundreds of complaints of massive price hikes on face masks, sanitizing and other supplies online as they rushed to stock up for the coronavirus pandemic. This continued even as the companies cracked down, removing or even banning listings of particular products.

The attorneys general cited sellers on Craigslist and Facebook jacking up prices on hand sanitizer by as much as 10 times the normal cost. They also cited a report by the U.S. Public Interest Research Group earlier this month, which found that one in six products sold directly by Amazon itself (not through third-party sellers) jumped in price by at least 50% in February.

On Monday, Amazon reiterated in a blog post that “it has zero tolerance for price gouging” and that it has already removed more than 500,000 listings because of coronavirus-based price gouging and suspended more than 3,900 U.S. selling accounts for violating fair pricing policies.

Walmart and eBay both said they are actively monitoring pricing for high-demand items and. Walmart last week wrote to attorneys general that it can “automatically unpublish items that are priced substantially in excess of prices recently offered on Walmart Marketplace or on competing sites, or that appear to be the subject of price gouging, or other unfair or abusive pricing practices.”

Facebook said it has removed ads and sale listings for high-demand items including coronavirus testing kits. “While enforcement is not perfect,” the company said in a statement, “we have put several automated detection mechanisms in place to block or remove this material from our platform.”

Craigslist did not respond to NPR’s inquiry Wednesday.

Price gouging laws vary across the U.S., but generally go after retailers and wholesalers for unfair markups, particularly during emergencies. Many states give some flexibility for prices to go up in response to shortages and hoarding behavior, typically by around 10% to 30% compared to earlier months.

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