Brian Huseman, Amazon's vice president of public policy, called for the establishment of a federal price gouging law in a blog post Wednesday. Third-party sellers on Amazon have been charging unfair prices for a wide range of items, from face masks and hand sanitizer to rice and beans.
Read the Amazon blog post here.
While some states do have such protections, Huseman said state laws don't go far enough to protect consumers against the kind of predatory pricing that shows up during crises like the ongoing coronavirus pandemic.
"As bad actors seek to profit off the COVID-19 crisis, federal legislation is needed to protect consumers."
— Amazon Policy (@amazon_policy) May 13, 2020
"While each state is unique and has the ability to enact individual legislative price gouging triggers and remedies, a federal price gouging law would ensure that there are no gaps in protection for consumers," Huseman writes. "This would also help retailers like Amazon more effectively prevent bad actors and ensure fair prices."
"Put simply, we want to avoid the $400 bottle of Purell for sale right after an emergency goes into effect, while not punishing unavoidable price increases that emergencies can cause, especially as supply chains are disrupted," Huseman said
Reporting by Annie Palmer at CNBC:
During the pandemic, Amazon, Walmart and other e-commerce companies struggled to curb third-party sellers who overcharged for products that spiked in demand. Sellers inflated prices for face masks, hazmat suits and hand sanitizer, among other products. For example, before Amazon ran out of stock, N95 face masks were priced at $13.28, but CNBC found examples of face masks being sold for as much as $195.
Huseman said Amazon has removed "well over half a million offers" believed to be gouging customers and suspended nearly 4,000 selling accounts in the U.S. for violating its fair-pricing policies. Amazon has also turned over to federal prosecutors and state attorneys general nationwide information on sellers it suspects engaged in coronavirus-related price gouging.
Huseman laid out several provisions he feels should be added to a federal price gouging law, including giving the Federal Trade Commission (FTC) the power to go after price gouging, allowing for "more expeditious enforcement." He added that the pricing standards should take into account any unavoidable rises in supply, transportation and labor costs that businesses face during a crisis.
"As bad actors seek to profit off the COVID-19 crisis, federal legislation is needed to protect consumers." https://t.co/LV2AlDuGuz
— Amazon News (@amazonnews) May 13, 2020
It's time for Congress to establish a federal price gouging law. Read my latest post on the Day 1 blog. https://t.co/m2J9AZakDa
— Brian Huseman (@b_huseman) May 13, 2020
— Bryan Caplan (@bryan_caplan) May 13, 2020
Under attack from lawmakers for not doing enough to stop price gouging, Amazon is now asking for a federal price gouging law. https://t.co/cE4prhv3yP
— Nandita Bose (@nanditab1) May 13, 2020
Remember when Facebook calling for privacy regulation was one of the biggest stories? Now Amazon seems to be taking a page from their playbook, calling for price gouging laws. Via @annierpalmer https://t.co/htubaUr77e
— Lauren Feiner (@lauren_feiner) May 13, 2020
Amazon is calling on Congress to pass a federal price gouging law that includes expanded powers for the FTC https://t.co/Fo1N8emU81
— Cristiano Lima (@viaCristiano) May 13, 2020
FILE PHOTO – The logo of Amazon is seen at the company logistics center in Lauwin-Planque northern France – Reuters, 2017