26 Colorado legislators join Attorney General, demand Amazon, other online marketplaces end coronavirus price gouging

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CoPIRG Foundation

26 Colorado legislators are calling on the country’s top online marketplaces to crack down on price gouging amidst the novel coronavirus (COVID-19) outbreak. In total 346 legislators representing 45 states joined CoPIRG Foundation in sending a letter Tuesday urging 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. Less than two weeks ago, 33 attorneys general, including Colorado Attorney General Phil Weiser, sent a similar letter to the same companies.

“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.

Since the beginning of the outbreak, the cost of critical health supplies has spiked dramatically on online platforms. An analysis last month from CoPIRG Foundation’s national affiliate, U.S. PIRG Education Fund, found that existing monitoring on Amazon’s platform was not preventing significant price hikes. In particular, the cost of most hand sanitizers and masks rose at least 50 percent higher than the 90-day average. Since then, more than 335,000 Americans have signed PIRG’s petition calling on Amazon to protect consumers from price gouging.

Despite some steps taken by companies, exorbitant price increases are still occurring. In just the last week, U.S. PIRG Education Fund highlighted numerous examples of price gouging, including: 

  • A digital thermometer for $27 but has an average price of $17.99 over the last 180 days
  • Three boxes of 20 N95 masks for $239 or $3.98/masks compared to a normal price of $1 per mask.
  • Toilet paper for $98 for a box of rolls, nearly three times its normal price.

“Coloradans 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 Danny Katz, CoPIRG Foundation Director. “We’re grateful for so many legislators in Colorado and the 346 total across the country 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.”

“Our Consumer Protection Section is focused on addressing price gouging during this public health crisis,” said Colorado Attorney General Phil Weiser.  “To that end, we have called on online platforms to be responsible and proactive in addressing this issue.  We are in contact with representatives from Amazon and other online retailers to coordinate efforts to address potential price gouging on items such as paper products, cleaning supplies, hand sanitizer and soap, and other goods.  We encourage all Colorado consumers to remain vigilant and report any scams or evidence of extreme price gouging. With these reports, the Attorney General’s Office will be able to take action and, where appropriate, work with other law enforcement agencies, including on a national level, to protect Colorado consumers and stop fraudsters.”

“When consumers are prevented from getting necessities to protect their homes and loved ones, or in this case, help prevent the spread of the virus, consumers suffer not only economic harm, they may suffer serious health consequences as well,” said Majority Leader of the Colorado State Senate Steve Fenberg. “With the pandemic expected to continue, online platforms and retailers must enact measures to prevent price gouging.”

Specifically, state legislators from 45 states — with the support of CoPIRG Foundation — 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.

“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 Katz.

The Colorado legislators who signed onto the letter include:

To learn more about price gouging, go to CoPIRG Foundation’s  website.

To report price gouging in Colorado, go to the Colorado Attorney General’s portal www.stopfraudcolorado.gov or call 800-222-4444.