AG Demands Major Online Marketplaces Do More to Crack Down on COVID-19 Price Gouging

TRENTON – Acting to protect New Jersey consumers as the COVID-19 pandemic continues, Attorney General Gurbir S. Grewal March 25 joined 32 other Attorneys General in calling on some of the nation’s largest online marketplaces to adopt more effective measures to combat price increases during emergencies.
 According to a release, in letters to Facebook, Amazon, Walmart, eBay, and Craigslist, the Attorneys General explain that it is “especially important” that “unscrupulous sellers do not take advantage of Americans by selling products at unconscionable prices” during this “unprecedented public health crisis.”
The companies receiving the letters have already taken various steps to address price gouging on their online marketplaces, but unconscionably high prices persist. And the companies should do more to protect consumers during emergencies, according to the Attorneys General. 
“Stay-at-home and social-distancing policies are leading more and more consumers to shop online,” stated Grewal. “It is essential that online marketplaces that are benefiting from this public health crisis—while our residents and the brick-and-mortar stores in our communities struggle—do everything they can to prevent sellers from preying on consumers by charging inflated prices.”
The letter from the Attorneys General urges the online marketplace operators to “prevent unconscionable price increases from occurring in the first place” by blocking third-party sellers from significantly increasing prices above those they were charging before an emergency. Currently, operators allow sellers to increase their prices and only remove products from the marketplace in response to complaints about price increases.
The Attorneys General also encourage the companies to adopt controls so that they can stop price hikes even before any government authority declares a state of emergency. And the Attorneys General urge each company to create a “Fair Pricing” page or portal where consumers can report price-gouging incidents to the companies directly.  
The demand for intervention from online marketplace operators comes as the Division of Consumer Affairs continues to receive and investigate allegations of price gouging.
By March 23 afternoon, the Division had received about 1,500 consumer complaints about approximately 1,000 business locations. 
The complaints allege unfair price hikes on surgical masks, hand sanitizer, disinfectant sprays and wipes, food, bottled water, and other items – some of which were being offered for sale in online marketplaces that received the Attorney Generals’ letter.
Division investigators have conducted about 300 inspections to date, with county consumer protection offices around the State conducting at least 75 more. In addition, the Division has issued 167 cease-and-desist letters, instructing businesses to cease any unlawful pricing, and served 32 subpoenas.
 “In New Jersey, charging exorbitant prices for essential items during a declared state of emergency is not only unconscionable, it’s illegal,” stated Paul R. Rodríguez, acting director of the Division of Consumer Affairs. “Whether you operate a major online marketplace or run a corner store, we expect you to obey the laws in place to ensure that all New Jersey residents have access to critical supplies during this nationwide health crisis.” 
Today’s letters to online marketplace operators highlight some of the COVID-19-related price hikes that have been documented as the virus has spread, including: a 50-percent increase in the price of hand sanitizer and facemasks on Amazon; the sale on Facebook Marketplace of an eight-ounce bottle of Purell Advanced hand sanitizer for $40; the sale on Craigslist of a two-liter bottle of Purell Advanced for $250 (or 10 times the normal price); and the sale on eBay of packs of face masks for $40 and $50.
The letters acknowledge that many over-priced items have been removed, and that the companies have taken other steps to address price gouging, but also note that the Attorneys General continue to receive daily complaints about online prices.
New Jersey consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the Division of Consumer Affairs at its website: https://www.njconsumeraffairs.gov/Pages/Consumer-Complaints.aspx.