State legislators from 45 states, including Massachusetts, demand online marketplaces end coronavirus price gouging

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State legislators from 45 states, including Massachusetts, demand online marketplaces end coronavirus price gouging

Persistent high prices on critical items show need for additional preventive measures

Boston—Twenty-five state legislators joined their peers across the nation calling on the country’s top online marketplaces to crack down on price gouging amidst the novel coronavirus (COVID-19) outbreak. Together, 346 legislators representing 45 states, joined MASSPIRG Education Fund 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 Massachusetts Attorney General Maura Healey, 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 the 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.

“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 Deirdre Cummings, Consumer Program Director for MASSPIRG Education Fund. “We’re grateful for the leadership of our state lawmakers who are standing up for consumers during this crisis.”

“At a time when unemployment is high and people are struggling for to pay their rent, mortgage, and food, they should not have to pay inflated prices for basic needs,” said Assistant Majority Leader in the House, State Representative Paul Donato, Medford.

“During this pandemic, it is crucial to protect our constituents from price gouging on basic household necessities,” said State Senator Ryan Fattman, Sutton. “In order to recover from the economic impacts of this crisis, one step we must take is to ensure that the price of goods sold remains consistent throughout this crisis.”

“The emotional, physical and financial toll of this global pandemic has been challenging on all of us, the last thing we need is for essential food and products to be financially inaccessible, said State Representative Tackey Chan, Quincy, House Chairman of the Legislature’s Joint Committee on Consumer Protection.  “Companies, especially big businesses, must take concrete steps and stop the practice of price gouging.  They have a moral obligation to ensure that all people have access to the basic necessities.”

Specifically, state legislators from 45 states — with the support of MASSPIRG Education Fund — 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.

“So many of our residents are scared right now: scared of a new, unknown disease, scared of losing their income; scared that they won’t be able to provide for their family amidst our nationwide turmoil. It is unconscionable for some sellers to capitalize on that fear and jack up costs on staples that Americans need to weather this crisis. It is incumbent on online platforms to take further steps to prevent price gouging from flourishing even more, ” said State Representative Tami Gouveia, Acton.

“With their vast technological prowess, companies have the ability and the responsibility 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 Cummings.

Consumers can report price gouging to Attorney General Maura Healey’s office, through their  on line consumer complaint process,  or their consumer hot line at (617) 727-8400.  

To learn more about how to identify and report price gouging, go to MASSPIRG Education Fund’s website.

The Massachusetts legislators who signed the letter.