State Attorneys General Call on Large On-Line Retailers to Crack Down on Price Gouging

In a previous post, we reported that state Attorneys General are actively pursuing investigations into alleged price gouging under state consumer protection laws during the COVID-19 pandemic.

On March 25, 33 state Attorneys General sent letters to the CEOs of Amazon, Craigslist, eBay, Facebook, and Walmart calling on the companies to take measures to prevent price gouging on their on-line platforms.

The Attorneys General cited numerous instances of price gouging occurring on these platforms, including hand sanitizers and facemasks costing 50 percent more than the average price for such products. Another example they cited was a bottle of hand sanitizer selling for $250, more than ten times the normal price.

The Attorneys General are urging the companies to implement the following measures:

• Set policies and enforce restrictions on unconscionable price gouging during emergencies.
• Trigger price gouging protections independent of, or prior to, an emergency declaration.
• Create and maintain a “Fair Pricing” page or portal where consumers can report price gouging incidents to the company directly.

The AGs’ letter explains that such policies should look at prices historically set by the seller, as well as other sellers of the same or similar products, in order to identify and eliminate price gouging. The Attorneys General are offering to work with the companies to help create policies that comply with state price gouging and consumer protection laws.

Attorneys General throughout the country have stepped up enforcement of their state’s price gouging and consumer protection laws during the COVID-19 pandemic. A number of states, including Arkansas, Indiana, Kansas, Massachusetts, New York, Pennsylvania, Rhode Island, Vermont, Washington, and Wisconsin have dedicated separate pages on their websites devoted specifically to providing education on potential price gouging and consumer protections issues during the pandemic. They are a useful resource for businesses and consumers alike, as B2B price gouging may violate state law just as B2C gouging does.

Orrick’s State Attorney General practice works closely with state AG offices and can provide guidance to Orrick clients regarding these issues, including concerns about B2B price gouging, during the COVID-19 pandemic.