Maryland legislators demand Amazon, other online marketplaces end coronavirus price gouging

347 nationally from 45 states, urge preventative measures

Maryland PIRG Foundation

(NOTE: THIS STORY IS BEING UPDATED TO REFLECT NEW SIGNERS)

Baltimore– Maryland legislators are calling on the country’s top online marketplaces to crack down on price gouging amidst the novel coronavirus (COVID-19) outbreak. Together, 347 legislators representing 45 states joined Maryland PIRG 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 Maryland Attorney General Brian Frosh, sent a similar letter to the same companies.

“We are facing unprecedented times, and, unfortunately, we’ve seen individuals try to take advantage of others during this moment of crisis,” explained Senate President Bill Ferguson. “Commercial platforms that facilitate transactions owe a heightened duty during this pandemic to do everything in their powers to lessen risk for consumers. Now, more than ever, corporate America needs to step up to the plate to ensure fairness and transparency in commerce.”

The letter was signed by 16 state legislators in Maryland including Senate President Bill Ferguson along with Senators Carter, Lam, Lee, Smith, and Washington and Delegates Boyce, Charkoudian, Debra Davis, Lehman, Lierman, Love, Luedtke, McIntosh, Palcovich Carr, Shetty, and Solomon. 

In the final days of the legislative session, the Maryland General Assembly passed a new law to prevent price gouging during the coronavirus epidemic, which went into effect March 20 after being signed by Governor Larry Hogan. The new law strengthens the Attorney General’s authority to go after price gouging and prohibits raising the price of many consumer goods and services that increase the seller’s profit by more than 10%.

Since the beginning of the outbreak, the cost of critical health supplies has spiked dramatically on online platforms. An analysis last month from the Maryland PIRG Foundation 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.

Marylanders can report price gouging through the office of Maryland Attorney General Brian Frosh with an online report form, by email, or by phone at 410-528-8662.

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

• A digital thermometer for $27.99 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.

“Marylanders 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 Rishi Shah, Maryland PIRG Foundation associate. “We’re grateful for so many legislators in Maryland and the 347 nationally 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.”

“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.

Specifically, state legislators from 45 states — with the support of Maryland PIRG Foundation — are calling on companies to:

• 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.
• 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.
• 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 Shah.

To learn more about how to identify and report price gouging, go to Maryland PIRG Foundation’s website.

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