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State AGs, legislators ask online sellers to police coronavirus price gouging

In one instance, packs of face masks were going for as much as $50 on eBay

Summary

Attorneys general from 33 states and a bipartisan group of legislators say e-tailers such as Amazon should have policies in place to deter sellers from unreasonable emergency pricing tactics.

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Attorneys general of 33 states have asked some major online outlets to set up policies to protect consumers against price gouging by sellers that use their platforms.

A bipartisan group of 346 legislators from 45 states has also joined this effort.

In a letter to these marketplaces ­– Amazon, Craigslist, eBay, Facebook and Walmart – Pennsylvania Attorney General Joseph Shapiro said, “Ripping off consumers by jacking up prices in the middle of a public emergency is against the law and online resellers like Amazon must join in this fight. These companies form the backbone of online retail and have an obligation to stop illegal price gouging now and put strong practices into place to stop it from happening in the future.”

The AGs cited some examples of price gouging that occurred on these marketplaces in March. For instance, packs of face masks were going for $40 and $50 on eBay.

According to an analysis by the U.S. Public Interest Research Group (PIRG), Amazon’s system was not preventing price hikes on its platform. This caused the public interest group to petition Amazon asking it to stop price gouging, an initiative that has garnered support from more than 250,000 Americans, according to the public advocacy group.

AGs ask for detection systems, complaint portals

Some actions the officials suggest these marketplaces take to police price gouging on their platforms include:

  • Setting up policies to prevent sellers from jacking up prices significantly during an emergency, compared to where they were previously.
  • Having systems that can detect conditions for upcoming weather or health-related emergency risks, to enable them to trigger the price gouging protections.
  • Initiating an online complaint portal for consumers to pursue their price gouging complaints.

“Online resellers have built advanced platforms and now it’s time to take that talent and help us beat COVID-19 by ensuring ready access to essential goods at fair prices,” said Shapiro.

Connecticut Attorney General William Tong, New Mexico Attorney General Hector Balderas and Vermont Attorney General T.J. Donovan were among the signatories to this bipartisan effort.

“We’re grateful for the leadership of Attorney General Shapiro and the other 32 attorneys general from both parties who are standing up for consumers during this crisis. Elected officials shouldn’t wait any longer to investigate how online platforms may be enabling price gouging,” said Adam Garber, consumer watchdog at U.S. PIRG.

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