Amazon accused of price gouging on essential items during coronavirus pandemic: watchdog

A consumer watchdog group is accusing Amazon and its third-party sellers of engaging in price gouging amid the coronavirus pandemic, against the e-commerce giant's own policies.

Amazon listed 15 of its own essential products, including disposable face masks, hand sanitizer, toilet paper and paper towels, with markups ranging from 76% to as much as 1,000% in comparison to previously listed Amazon prices or other retailers' prices, according to a Sept. 10 report from consumer rights nonprofit Public Citizen.

The nonprofit also found 10 products from third-party sellers, including flour, sugar, hand sanitizer and disinfectant spray, with markups ranging from 225% to 941%.

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"Amazon has fundamentally misled the public, law enforcement and policymakers about price increases during the pandemic," Alex Harman, Public Citizen competition policy advocate and author of the report, said in a statement. "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."

Harman added that his findings "demonstrate the need for a federal price-gouging law and for Amazon to implement major reforms to its pricing and product listing practices."

The report notes that Amazon itself called on Congress to implement such a law in a May 13 blog post.

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"Whenever the demand for basic necessities increases, there are bad actors who try to exploit circumstances by marking up goods in a way that goes far beyond the laws of supply and demand. Amazon has zero tolerance for price gouging and longstanding policies and systems in place to combat it," the blog post reads.

It adds that Amazon has "suspended nearly 4,000 selling accounts in our U.S. store alone" for price-gouging and "created a special mechanism for state attorneys general offices to quickly and easily escalate the consumer complaints they have received."

The blog post then details Amazon's recommendation for a federal price-gouging bill, which would establish pricing standards, define which sellers and products are covered by the law and give the Federal Trade Commission and state attorneys general more access to "civil penalties, restitution, and equitable remedies."

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The e-commerce giant's policies prohibit price gouging and state that sellers face suspension if they engage in the practice.

Amazon uses automated systems as well as human moderators to identify price gouging on the platform, according to a March 23 blog post in response to reports of essential items like masks and sanitizer with higher-than-normal prices.

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Still, the tech giant apparently failed to catch price-gouging not only from third-party sellers but from its own brands, according to Public Citizen. One example included in the report was corn starch, which Amazon listed at $8.99 compared to Public Citizen's "expected price" of $0.89 — a 1010% markup.

"Amazon is not a victim in the price gouging on its marketplace – it is a perpetrator," Harman said. “Price gouging is an insidious exploitation of the most vulnerable, especially during a national emergency. There is no excuse for Amazon, one of the largest and most successful corporations in history, to take advantage of vulnerable, scared consumers."

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