States Pursue More Than 5,000 Complaints of Price Gouging
(Bloomberg) -- Amazon, Walmart, EBay and other large online sellers were urged by state law enforcement officials to crack down on price gouging that preys on panic over the coronavirus pandemic amid surging complaints by consumers.
The attorneys general of New York and California called on the companies Friday to take action as 6,000 complaints have poured in to authorities across the U.S. in the past month, with outrage expressed at everything from $80 hand sanitizer to a 50% hike in rice prices.
“Price gouging during a time of national emergency is not only disgraceful, it is illegal,” California Attorney General Xavier Becerra said in a statement. “Large online marketplaces have a responsibility to the public to take immediate and vigorous steps to eliminate predatory behavior, which they know is illegal, from their platforms.”
As Americans hunker down and hoard to survive the coronavirus pandemic, regulators are rushing to stamp out exploitative pricing. They’re poring over emails, sending inspectors to check out tips and firing off cease-and-desist letters, according to an analysis by Bloomberg of data and reports from more than 40 states.
Amazon tweeted a response to Becerra and said it welcomes the opportunity to work with officials to help prosecute “bad actors.”
“We are disappointed that bad actors are attempting to artificially raise prices on basic need products during a global health crisis and, in line with our long-standing policy, we have recently blocked or removed hundreds of thousands of offers,” the company said in a statement.
Online platforms don’t have the incentive to self-police themselves because they get a cut of each transaction, including every pack of toilet paper sold for $60, said Tristan Snell, a lawyer with Tristan Snell Pllc who previously worked on consumer protection issues for the New York attorney general’s office. Many of the abuses are coming from sellers using Amazon and Walmart third-party platforms to jack up prices for household staples, he said.“There’s no doubt that online commerce has exacerbated this problem,” he said. “The idea of cornering a market was something that used to be reserved for millionaire financiers. It’s a very old timey kind of thing. But we literally are at a point where people can corner the market in hand sanitizer.”
Read More: States Chase Price Gougers With 6,000 Complaints Pouring In
Walmart, eBay and Craigslist didn’t immediately respond to requests for comment.
Retailers of all sizes are in now in the cross-hairs. In Washington, the state with the first confirmed case of the virus in the country, Attorney General Bob Ferguson is sending a team of 10 investigators to stores to examine products on the shelf and issuing subpoenas to websites.
“Washingtonians are facing a life-and-death situation” and need access to “critical goods,” Ferguson said in an interview. “My mom is 91 years old. It’s important for individuals like my mom to have access to hand sanitizer. They can cost 60 bucks for a four-ounce container.”
The complaints spiked after President Donald Trump declared a national emergency last Friday, leading many state and local governments to do the same. They come as authorities in Europe grapple with similar concerns. On Friday, the U.K.’s competition regulator launched a task force to crack down on such exploitation. The European Union’s anti-fraud office said it’s probing sales of fake medical and personal protection products.
While some U.S. states already have laws on the books that ban price gouging, generally defined as boosting a price 10% or more in a crisis, emergency declarations often trigger temporary measures.
The Oregon AG’s office on Wednesday got a complaint about a supermarket in Beaverton selling 20 pounds of rice for $29, almost $10 more than usual, according to spokeswoman Kristina Edmunson, who said the office was preparing its first cease-and-desist letters. Twitter was rife with hashtags such as #price gouging and #panicbuying. Users called out two-pack face masks at $19.95, up from $1.50, and 12 jumbo rolls of Kroger toilet paper on eBay for $99.95 plus $11.75 for shipping -- or best offer.
“I’m outraged that anybody would try to profiteer on a crisis, particularly on items that are necessary for the health and safety of Ohioans,” Attorney General Dave Yost said in a statement Thursday. “We don’t have a price-gouging law in Ohio because we believe in free markets, but free markets don’t include the idea of holding toilet paper and surgical masks hostage.”
Most of the complaints are in the East, with New York topping the list at 1,350. In New York City alone, the Department of Consumer and Worker Protection has received more than 1,000 calls since March 5, when the city’s first rule against virus-related price increases was enacted.
In addition to a 1.2-liter bottle of hand sanitizer for $79.99 at a hardware store in Midtown, New Yorkers could snap up a box of 100 disinfectant wipes at a drugstore in Chelsea for $100.
Read More: That $400 Bottle of Hand Sanitizer Is Very Hard to Police
(Corrects law firm name in seventh paragraph)
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