Amazon calls on Congress to create anti-price gouging law

Amazon has received a fair amount of criticism for perceived inaction against seller price gouging during the COVID-19 pandemic. While the retail giant has made efforts to rein in the opportunist activity (pulling some half a million offending listings), critics have pointed to the company's slow response, along with continued problems with a number of high-demand products sold through affiliates.

Today, however, the company's VP of Public Policy, Brian Huseman, penned an open letter to Congress, asking lawmakers to make price gouging illegal during a national crisis. The executive notes that the policy has been an effective tool in states like Tennessee where such laws already exist.

Our collaborative efforts to hold price gougers accountable have clarified one thing: to keep pace with bad actors and protect consumers, we need a strong federal anti-price gouging law," Huseman writes. As of now, price gouging is prohibited during times of crisis in about two-thirds of the United States. The disparate standards among states present a significant challenge for retailers working to assist law enforcement, protect consumers, and comply with the law."

Jeff Bezos also addressed the issue in his annual shareholder letter last month, writing, To accelerate our response to price-gouging incidents, we created a special communication channel for state attorneys general to quickly and easily escalate consumer complaints to us."

The company has certainly taken some efforts to curb the act. As it notes, nearly 4,000 seller accounts have been suspended in the U.S. store for policy violations. But a cursory search for in-demand products yields plenty of prohibitively expensive listings for once-ubiquitous household products. Home cleaning supplies in particular have seen a massive spike in pricing.

We asked Thinknum to chart the price of Clorox-branded items from late last year through now and the graph speaks for itself:

As retail store shelves have gone bare, Amazon has become an essential lifeline for many - a fact that plenty of predatory sellers have been more than happy to capitalize on. Beyond essential supplies, prices have gone through the roof for a number of products currently in short demand, such as the Nintendo Switch, which has been squeezed through a combination of increased interest and supply chain issues.

The company rightfully notes that enforcing such policies as a matter of the law will be a kind of juggling act. Put simply, we want to avoid the $400 bottle of Purell for sale right after an emergency goes into effect, while not punishing unavoidable price increases that emergencies can cause, especially as supply chains are disrupted," Huseman writes. Furthermore, any prohibitions should apply to all levels of the supply chain so that retailers and resellers are not forced to bear price gouging increases by manufacturers and suppliers."