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State AGs call on Amazon, Facebook and others to crack down on coronavirus price gouging

Amazon CEO Jeff Bezos on October 02, 2019.

Elif Ozturk | Anadolu Agency | Getty Images

A group of 33 attorneys general from U.S. states and territories called on Amazon, eBay, Facebook, Walmart and Craigslist to prevent price gouging on coronavirus-related products.

The coalition, led by Pennsylvania’s Democratic Attorney General Josh Shapiro, sent a letter to the companies saying they “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.” Attorneys general from California, Colorado and the District of Columbia were among those involved in the effort.

The letter acknowledged that the tech platforms have already taken steps to remove some of the overpriced products from their sites but said consumers were already harmed by their presence. The attorneys general urge the companies to take proactive measures to prevent price gouging on their sites, “[r]ather than playing whack-a-mole.”

The attorneys general pointed to examples of price gouging on several of the platforms identified by the U.S. Public Interest Research Group Educated Fund and news reports. On Amazon, they wrote, U.S. PIRG found over half of the available hand sanitizers and face masks spiked at least 50% compared with the average price after the World Health Organization declared a global health emergency on Jan. 30. On Craigslist, a two-liter bottle of hand sanitizer was listed for $250, or ten times the standard price, the letter said, citing The Atlantic. On Facebook’s marketplace, an eight-ounce bottle of hand sanitizer was going for $40, the letter said, citing a Washington Post report.

They advised the companies to take on strong policies that deter price gouging, trigger protections from price gouging outside of the case of an emergency and maintain a way for consumers to report potential violations.

Amazon has taken steps to punish sellers on its platform that have sought to profit off fear-induced buying during the COVID-19 crisis. The company told Sen. Ed Markey, D-Mass., earlier this month that it removed more than half a million “high-priced offers” from its marketplace and suspended 2,500 seller accounts in its U.S. marketplace for violating its policies on price gouging.

Both Amazon and eBay told sellers it would block new listings for face masks and hand sanitizer in an effort to stop further exploitation. Similarly, Facebook has banned ads and listings for face masks on its social media platform and marketplace.

A Walmart spokesperson previously told CNBC the company is monitoring the site for unsubstantiated medical claims and taking down listings with inflated prices. 

State AGs have taken a particularly active interest in tech companies over the past year. Attorneys general from 50 states and territories are involved in an antitrust probe into Google, and nearly as many are part of a similar probe into Facebook. The Federal Trade Commission is reportedly looking into Amazon’s competitive practices as well, though it has not confirmed an investigation.

Representatives from each of the companies named in the letter were not immediately available to comment.

This story is developing. Check back for updates.

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