Claims of Amazon pandemic price gouging cry out for Washington state AG investigation
Between March and mid-August, when folks were sheltering at home and shopping more online, disaster profiteers sprang into action by gouging consumers for essential supplies like face masks, disinfectants and toilet paper.
Healthy competition in the marketplace is no crime. But charging $250 for a two-liter bottle of hand sanitizer should be.
Since Gov. Jay Inslee issued his shutdown orders in March, Washington Attorney General Bob Ferguson has received almost 1,300 complaints of over-the-top pricing.
Amazon.com, where many of the jacked up prices could be found, blamed third-party vendors for using its platform to capitalize on the crisis. The Seattle-based retail giant vowed to crack down on the practice and even called for a federal law against it — a smart proposal, indeed.
Amazon crowed about its “Fair Pricing Policy” and made a show of suspending thousands of third-party sellers over coronavirus price-gouging.
But hold the applause, please, because at the same time Amazon was part of the consumer-advocacy chorus, it was spiking the prices of its own products and letting vendors do the same, according to the watchdog group Public Citizen.
Among the group’s findings of marked-up essential items sold on Amazon: Dial liquid antibacterial hand soap increased by 470%; a one-pound box of Domino powdered sugar increased by 520%; and a pack of 50 disposable face masks increased by 1,000%.
Meanwhile, the company’s founder and CEO, Jeff Bezos, saw his personal wealth rise to an astounding $200 billion.
Clearly what’s needed is a law that prohibits excessive price surging during a disaster. Thirty-five states have one; Washington does not. Ferguson wants that gap filled in the next legislative session.
In a meeting with our Editorial Board Wednesday, Ferguson said his office is drafting a bill with a bipartisan group of legislative sponsors.
While we wait, can he take action against the world’s largest e-commerce company with headquarters in his own backyard? A company that employs nearly 900,000 Americans and announced this week it plans to hire another 100,000 full- and part-time employees across the U.S. and Canada?
If the AG’s office hasn’t already started an investigation into the Public Citizen allegations, it needs to do so.
Ferguson, who’s running for reelection against Republican Matt Larkin, told us he couldn’t speak specifically about any possible investigation of Amazon. But he did reference numerous cease and desist letters the AG’s office has sent in price-gouging cases; the first was sent to five independent Amazon sellers on March 31, warning them to stop overcharging or face legal action.
Ferguson said he’s enlisted the public’s help to identify offenders and has launched a website called “See it, snap it, send it.” Since the pandemic began, the AG’s office has made more than 400 on-site visits to Washington businesses accused of gouging.
The AG says the Consumer Protection Act gives him authority to take action against outrageous profiteering, even by a company with a near monopoly on online shopping if necessary. But he says a law, either federal or state or both, would provide clarity on what exactly constitutes gouging.
An Amazon spokesperson provided a statement, saying “ there is no place for price gouging on Amazon and that includes products offered directly by Amazon. Our systems are designed to meet or beat the best available price amongst our competitors and if we see an error, we work quickly to fix it.”
The statement continued: “Our teams continue to monitor our store 24/7 and have already removed over a million offers. Our customers expect to find low prices in our store, and we work hard to provide the best available price across the hundreds of millions of products in our store for all customers, every day.”
Certainly not all price hikes are unethical; they absorb some extra costs inherent in emergencies, signal scarcity and get shoppers to exercise some restraint on consumption.
But the kind of surge pricing of essential goods we saw in the early weeks of the pandemic should be illegal.
Until it is, state lawyers will be forced to play a vigorous game of whack-a-mole with companies that have no problem playing outside the bounds of fair-market principles.
If Public Citizen is correct and a state investigation confirms its findings, then Amazon should be whacked, too.
This story was originally published September 18, 2020 at 5:55 AM.