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Attorneys general demand online marketplaces end coronavirus price gouging

TexPIRG Education Fund joins 33 Attorneys General in urging preventative measures
For Immediate Release

AUSTIN-- Texas Attorney General Ken Paxton did not join in the call to the country’s top online marketplaces to crack down on price gouging amidst the novel coronavirus (COVID-19) outbreak. A bipartisan group of 33 attorneys general, led by Pennsylvania Attorney General Josh Shapiro along with co-leading Attorneys General Hector Balderas (NM), William Tong (CT), and T.J. Donovan (VT), sent a letter today urging the companies -- Amazon, Craigslist, eBay, Facebook and Walmart -- to quickly implement preventative measures on their platforms to ensure that consumers don’t get taken advantage of during this public health crisis.

“We believe you have an 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,” the letter reads, in part.

The letter follows an analysis by TexPIRG Education Fund which revealed that existing monitoring on Amazon’s platform was not preventing significant price hikes. In particular, the price of most of the hand sanitizers and masks rose at least 50 percent higher than the 90-day average. Since then, more than 267,000 Americans have signed PIRG’s petition calling on Amazon to protect consumers from price gouging.

“Americans are already worried about their health and the health of their loved ones during this pandemic. They shouldn’t also have to worry about being ripped off on the critical supplies they need to get through it,” said Bay Scoggin, TexPIRG Education Fund Director.

“We wish Attorney General Paxton had gotten back to us, as he has been a leader on this before, so we were hopeful he would join the 33 other attorneys general who are standing up for consumers during this crisis. Elected officials shouldn’t wait any longer to investigate how online platforms may be enabling price gouging.”

Specifically, TexPIRG Education Fund and its national network are calling on companies to:

  1. Set policies and enforce restrictions on unconscionable price gouging during emergencies. Online retail platforms should prevent unconscionable price increases from occurring by creating and enforcing strong policies that prevent sellers from deviating in any significant way from the product’s price before an emergency. Such policies should examine historical seller prices, and the price offered by other sellers of the same or similar products, to identify and eliminate price gouging.

  2. Trigger price gouging protections independent of, or prior to, an emergency declaration. Price gouging on a platform often begins prior to official emergency declarations. Companies should trigger the above protections when its systems detect pricing spikes generally, or conditions that could lead to price gouging like pending weather events or future possible health emergencies.

  3. Create and maintain a “Fair Pricing” Page or Portal where consumers can report price gouging incidents to companies directly. A simple tool requesting the name of the vendor, the item for sale, the alleged unfair price, and the state of residence of the complainant would quickly and efficiently allow companies to identify and freeze or remove truly bad actors and make appropriate referrals for enforcement or prosecution. These complaints should be made available upon request by offices of the attorneys general.

The letter was co-led with the Offices of Attorneys General from Connecticut, New Mexico and Vermont, in addition to signatures from the Offices of Attorneys General in California, Colorado, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Puerto Rico, Rhode Island, Utah, Virginia, Washington and Wyoming.

“With their vast technological prowess, companies have the ability and the moral obligation to take aggressive action to prevent exploitative price gouging -- at all times, but especially during this crisis. These few potential solutions should be seen as just the beginning,” finished Scoggin.

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