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AG Nessel and Colleagues Warn Amazon, Facebook, eBay, Craigslist, Walmart: Online Marketplaces Aren't Exempt From Price-gouging Laws

LANSING ― Michigan Attorney General Dana Nessel joined a coalition of attorneys general today in urging Amazon, Facebook, eBay, Walmart and Craigslist to more rigorously monitor price-gouging practices by online sellers using their services. 

“Online marketplaces are continuing to grow in popularity for consumers, and we are noticing an increase in price-gouging practices online just as we have at true brick-and-mortar shops,” Nessel said. “We urge retailers with online marketplaces to monitor those venues for price-gouging and take commonsense measures to protect consumers from wrongfully inflated prices.” 

Nessel’s office has taken a series of actions to combat price-gouging in Michigan, especially during the nation’s current public health crisis. With a significant increase in consumer complaints related to price-gouging over the past two weeks, Nessel held a news conference with state officialssupported legislation introduced at the state level, and extended the department’s consumer protection hotline hours for a period of time. Nessel also sent cease and desist letters to both brick and mortar and online retailers.   

The letter from the coalition of attorneys general lists several examples of price-gouging on these online marketplace platforms, all of which took place only in March: on Craigslist, a 2-liter bottle of hand sanitizer was being sold for $250; on Facebook Marketplace, an 8-ounce bottle was being sold for $40; and on eBay, packs of face masks were being sold for $40 and $50. 

In the letter, the coalition recommends several changes to protect consumers from price-gouging: 

  • Set policies and enforce restrictions on 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. 

Nessel joins the attorneys general of California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, Wyoming, and Puerto Rico in submitting this letter.