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State attorneys general ask online retailers to crack down on price gouging

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Published: Mar. 25, 2020 at 1:00 PM EDT
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Virginia's attorney general and the attorneys general of 32 other states issued a joint letter on Wednesday urging major online retailers to do a better job of enforcing laws against price gouging during the coronavirus crisis.

The letter – sent on behalf of Virginia, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Rhode Island, Utah, Vermont, Washington, Wyoming, and Puerto Rico – specifically addresses Amazon, Facebook, Ebay, Walmart, and Craigslist.

“We are in the middle of a national public health crisis and the last thing folks should be worrying about is someone charging insanely high prices for necessary goods like cleaning supplies, hand sanitizers, or medicines,” said Attorney General Herring. “While Virginia law offers protections for folks against price gouging, online marketplaces like Amazon, Facebook or Craigslist must be regulated by their parent companies to make sure people aren’t taking advantage of this crisis. We must all play our part in making sure that everyone has the things that they need during this unprecedented time and that includes putting a stop to price gouging.”

The joint letter lists examples of price gouging seen on the online platforms in March, including a two-liter bottle of hand sanitizer on Craigslist for $250, an 8-oz. hand sanitizer bottle on Facebook Marketplace for $240, and packs of face masks being sold on Ebay for $50.

In the letter, Herring and the other attorneys general said "we want the business community and American consumers to know that we endeavor to balance the twin imperatives of commerce and consumer protection in the marketplace. And, while we appreciate reports of the efforts made by platforms and online retailers to crack down on price gouging as the American community faces an unprecedented public health crisis, we are calling on you to do more at a time that requires national unity.”

They're recommending the following changes to protect people from price gouging:

• 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 prior to an emergency declaration, such as when your systems detect conditions like pending weather events or future possible health risks

• Implement a complaint portal for consumers to report potential price gouging

Under Virginia's current state of emergency, the

is in effect, which prohibits any supplier from charging “unconscionable prices” for “necessary goods and services” during the thirty-day period following a declared state of emergency.

Items and services covered by these protections include but are not limited to water, ice, food, cleaning products, hand sanitizers, medicines, personal protective gear and more. The basic test for determining if a price is unconscionable is whether the post-disaster price grossly exceeds the price charged for the same or similar goods or services during the ten days immediately prior to the disaster.

Any violations of the price gouging act can be reported to the

for investigation because they're enforeceable by the Virginia Consumer Protection Act.

Price gouging reports can be sent to the division:

• By phone: (800) 552-9963

• By email: consumer@oag.state.va.us

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