Amazon Under Fire For Covid-19 Pandemic Price Gouging

Consumer watchdog report accuses the e-commerce giant of increasing prices as much as 1000%.

September 17, 2020, Los Angeles, CA – Amazon charged consumers inflated prices for Covid-19 pandemic essentials, says a consumer watchdog report accusing the world’s largest online retailer of price gouging. Relying on its observations and data from price-tracking sites, the nonprofit public interest group found Amazon "jacking up prices on face masks, toilet paper, and antibacterial soap by up to 1,000% ."

Nonprofit watchdog Public Citizen’s competition policy advocate and the report’s author, Alex Harman, says, “Amazon has fundamentally misled the public, law enforcement and policymakers about price increases during the pandemic.” Hartman added, "Amazon has publicly blamed third-party sellers for price increases while continuing to raise prices on its own products and allowing those sellers to increase their prices. Increased demand and lack of supply are literally why there are price-gouging laws.”

One of the roughly two dozen items tracked in the report, a 7.5-ounce bottle of Dial-brand hand soap, was available for $6.41 from Amazon directly and for about the same price from a third-party merchant. Target Corp. listed the product for $1.49 while CVS Health Corp. charged $2.29, though neither made it available for home delivery. Other items in the report included face masks, gloves, toilet paper, paper towels, and powdered sugar.

Amazon has historically and categorically denied liability for "third-party marketplace sellers," and the report challenges Amazon’s public position that it’s an innocent bystander of price gouging perpetrated by a select few “bad actors” selling products on its popular webstore. It accuses Amazon of price gouging, as well, on products the online retailer sells directly. “There is no place for price gouging on Amazon, and that includes products offered directly by Amazon,” an Amazon spokesman said. “Our systems are designed to offer customers the best available online price, and if we see an error, we work quickly to fix it.”

Amazon supports a federal law but only one that would immunize it from liability for price gouging by third parties that sell on its platform.

Germany’s cartel regulator also has questioned Amazon about prices during the outbreak. As part of a campaign against inflated prices by resellers, 3M Co. sued and later settled with an Amazon merchant.

Price gouging is illegal in about 35 states, with some states prohibiting price increases of as little as 10%. But the nature of online platforms, which transcend state borders, has made price gouging enforcement increasingly difficult at the state level. The report calls for a national prohibition on price gouging and recommends that Amazon publish list prices and pricing history for specific items.

Consumers have the choice to shop the major retailers (Kroger, Costco, Home Depot, Target, Lowes, Best Buy, etc.) who offer consumers competitive local and online purchase options with prompt delivery.