AG Racine and 33 Attorneys General Urge Amazon, Craigslist, eBay, Facebook, and Walmart to Crack Down on Online Price Gouging

Attorneys General Warn Online Marketplaces Are Not Exempt from Price Gouging Laws

WASHINGTON, D.C. – Attorney General Karl A. Racine today joined with 33 fellow Attorneys General to urge Amazon, Craigslist, eBay, Facebook, and Walmart to crack down on online price gouging on their platforms. In their letters to these major online platforms, the Attorneys General pushed the companies “to do more at a time that requires national unity.” Specifically, the bipartisan group recommends that these companies craft policies to restrict price gouging during emergencies, build tools to detect price spikes and anticipate conditions that lead to price gouging, and create pages that allow users to report suspected price gouging directly.

“Major online businesses must ensure consumers are charged fair prices when they shop on their platforms,” said AG Racine. “We appreciate the efforts these companies are making during this difficult time and are hopeful that they will continue work with State Attorneys General to do more to root out price gouging online and protect consumers.”

The District’s price gouging consumer protection law goes into effect when the Mayor declares a state of emergency, which occurred on March 11. The law makes it illegal for individuals or businesses to charge higher than the normal average retail price for goods and services. Specifically, the law bars raising costs for services more than 10 percent above the price charged within 90 days before the declaration. For goods and merchandise, the law bars an increase in markup over wholesale costs above the markup percentage in place 90 days before the declaration. OAG has sent and will continue to send cease-and-desist letters, file suit to enforce the law, and seek to revoke licenses and permits. The penalty for price gouging in the District is $5,000 per violation.

OAG is investigating price gouging complaints submitted by District consumers. Since March 11, OAG has received more than 25 complaints and sent cease-and-desist letters to two D.C. convenience stores for overcharging for disinfecting products and gloves, among other items.

What Online Platforms and Retailers Can Do
In their letters, the Attorneys General provide examples of price gouging present on online platforms during March. For example, on Craigslist, a two-liter bottle of hand sanitizer was being sold for $250; on Facebook Marketplace, an eight-ounce bottle was being sold for $40; and on eBay, packs of face masks were being sold for $40 and $50.

The Attorneys General recommend several changes to protect consumers from price gouging:

  • Set policies and enforce restrictions on price gouging during emergencies: Online retail platforms should create and enforce strong policies that prevent sellers from deviating in any significant way from the product’s price before an emergency. Such policies should examine historical prices, and the price offered by other sellers of the same or similar products, to identify and eliminate price gouging.
     
  • Trigger price gouging protections prior to an emergency declaration: These companies should retool their platforms to detect and respond to price spikes, as well conditions that lead to price gouging, such as pending weather events or future public health crises.
     
  • Implement a complaint portal: The companies should build pages on their websites that allow consumers to report potential price gouging directly.

Copies of the letters are available here: Amazon, Craigslist, eBay, Facebook, Walmart

The letters were co-led by the Attorneys General of Connecticut, New Mexico, Pennsylvania, and Vermont, and joined by the Attorneys General of California, Colorado, District of Columbia, Delaware, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Rhode Island, Utah, Vermont, Virginia, Washington, Wyoming, and Puerto Rico. 

How to Report Price Gouging
To help OAG investigate price gouging complaints, consumers should attempt to identify the prices of goods and services before the emergency declaration on March 11. Submit price gouging complaints to OAG by:

OAG’s COVID-19 Resources
In response to the Coronavirus (COVID-19) pandemic, the Office of the Attorney General (OAG) is teleworking until at least April 27. You can access OAG services online and over the phone during our telework period at:

Know Your Rights: Read OAG’s Consumer Alert to protect yourself from scams, price gouging, discrimination, and to get information about consumer, worker, and tenant rights during the pandemic. This alert is also available in Amharic, Chinese, French, Korean, Spanish and Vietnamese.

Get the latest OAG updates by signing up for our newsletter: www.oag.dc.gov/newsletter

For more District Government updates and how you can prevent the spread of germs visit: coronavirus.dc.gov

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