Attorneys general from across the country are demanding that the companies that stock America’s vast virtual shelves – Amazon, Craigslist, EBay, Facebook, Walmart – crack down on price gouging for critical supplies from hand sanitizer to disinfectants during the coronavirus pandemic.
The group of 33 top cops sent a letter Wednesday urging the companies to heed their “ethical obligation and patriotic duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real-time.”
“When consumers cannot get what they need to protect their homes and their loved ones – or, in this case, help prevent the spread of the virus – consumers suffer not only economic harm, but serious health consequences as well,” the letter said.
Attorneys general from California to Washington, D.C. says companies must do more than play “whack-a-mole” and should immediately adopt policies that deter price gouging and give consumers a way to report violations. They also are urging companies to have a system in place to trigger price-gouging protections whenever there’s a natural disaster, epidemic or other emergency.
Amazon referred USA TODAY to a company blog post, saying it has taken steps to stop price gouging. It says it has suspended more than 3,900 sellers and removed more than 500,000 offers. Walmart shared a letter sent to attorneys general last week saying it’s monitoring prices and sellers and has put into place systems to detect and prevent price gouging.
In a statement, eBay said it is making “every effort to ensure that anyone who sells on our platform follows local laws and eBay policies.”
Facebook says it has banned ads and listings for emergency supplies and began automated enforcement of the bans this week. “Since COVID-19 was declared a public health emergency, Facebook has removed ads and commerce listings for the sale of masks, hand sanitizer, surface disinfecting wipes and COVID-19 test kits,” the social media company said in a statement. “While enforcement is not perfect, we have put several automated detection mechanisms in place to block or remove this material from our platform.”
Craigslist could not be reached for comment.
Coronavirus price gouging:Companies crack down but listings keep popping up
As COVID-19 spreads and people rush to protect themselves and their families from getting sick, the U.S. has seen record demand for everything from face masks to toilet paper.
Shoppers scouring the internet say they are being hit with eye-bulging prices as third-party sellers test what the market will bear. USA TODAY began documenting the fast-spreading phenomenon of price gouging on March 6 as consumers flooded social media with complaints. A subsequent report by the U.S. Public Interest Research Group confirmed rampant price gouging as panic buying intensified.
Companies moved swiftly to announce policies to combat price gouging, removing product listings or blocking sellers jacking up prices, but consumers continue to report to USA TODAY that a simple search of these sites turn up listing after listing of sought after supplies being hawked at enormously inflated prices.
Nearly three dozen states have anti-gouging laws. Price gouging generally refers to raising prices on goods and services to unfair levels, particularly during times of crisis.
What may seem like mercenary or predatory pricing to some consumers is normal market behavior to economists.
Vendors who jack up prices during a hurricane, earthquake or pandemic often blame market conditions. And Michael Salinger, an economics professor at Boston University’s Questrom School of Business and former director of the Bureau of Economics at the Federal Trade Commission, says they’re right. The real problem is that there are too few of these supplies available, Salinger told USA TODAY earlier this month.
Economists say a sharp increase in prices either by retailers or wholesalers is the natural response to such a sudden surge in demand and can help replenish supplies.
Higher prices also discourage consumers from hoarding masks that are vital for first responders and health care professionals or people at high risk of contracting coronavirus, keeping the available supplies in the hands of those who need them most, economists say.
But Dana Radcliffe, senior lecturer in business ethics at Cornell University Johnson College and an adjunct professor of ethics and public policy at Syracuse University, says the normal rules should not apply in emergencies when demand outstrips supply of basic necessities.
“It’s trying to profit off the fact that the people around you are in very serious need, when what we should be doing is helping our community get through it, rather than pursue our own interest at the expense of our fellow citizens,” he told USA TODAY earlier this month. “I think we are right to be angry about it.”