Over the past month, state enforcers have declared a war on price gouging, but some of the most effective enforcers have not been the states. Online platforms and other large retailers have taken extraordinary steps to restrict price gouging, and their monitoring has already led to hundreds of thousands of items pulled from e-commerce websites. With entire countries engaging in social distancing, e-commerce has become de-facto commerce for many, and this dramatic and sudden shift gives online sellers enormous influence on price gouging enforcement.

Online platforms were some of the first to take action on price gouging. For example, on February 28, before most states had declared a state of emergency, eBay reminded sellers that price increases during an emergency can be considered violations of eBay’s listing policies. And on March 5, eBay decided to block all listings of facemasks, hand sanitizer, and disinfecting wipes, citing “regulatory restrictions” across the United States.

Similarly, Amazon has reminded sellers it “has zero tolerance for price gouging.” By partnering with local law enforcement and using automated monitoring, in the month of March alone, Amazon suspended thousands of accounts for “violating [Amazon’s] fair pricing policies,” and removed hundreds of thousands of items from its online marketplace. Walmart took a similar tack by “automatically depublish[ing] listings that price items substantially in excess of other listings. (See Politico).

Despite active enforcement online, many State Attorneys General do not think the platforms are doing enough. In a March 25th letter to major online platforms, 32 attorneys general cited high prices for hand sanitizer and face masks on Craigslist and eBay during the month of March. The AGs wrote that the major online marketplaces “have an obligation to stop illegal price gouging,” and the AGs’ letter includes recommendations for doing so. Notably, these recommendations include “creating and enforcing strong policies that prevent sellers from deviating in any significant way from the product’s price before the emergency,” and creating a portal for customer price gouging complaints.

It is important to note that many of the entities being taken down do not appear to be well-established retailers. Nevertheless, reputable sellers likewise may want to monitor their sales and pricing, as well as the sales of their resellers. Also, firms using algorithmic pricing can consider monitoring these algorithms to prevent sudden price spikes as part of their compliance efforts.

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Visit Proskauer on Price Gouging for antitrust insights on Covid-19.

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Photo of Christopher E. Ondeck Christopher E. Ondeck

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters…

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters for clients in a number of industries, including advertising, aerospace, alcoholic beverages, appliances, building materials, consumer products, defense, franchise, medical devices, metals, mining, natural resources, oil and gas, packaging, pharmaceuticals, software and telecommunications. He also has developed substantial experience advising clients regarding the application of the antitrust laws to the pharmaceutical industry, the agriculture industry, trade associations and the energy industry.

Photo of John R. Ingrassia John R. Ingrassia

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating…

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating to competition and antitrust, CFIUS or foreign investment issues.

For more than 25 years, John has counselled businesses facing the most challenging antitrust issues and helped them stay out of the crosshairs — whether its distribution, pricing, channel management, mergers, acquisitions, joint ventures, or price gouging compliance.

John’s practice focuses on the analysis and resolution of CFIUS and antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger CFIUS and HSR notification requirements. He advises clients on issues related to CFIUS national security reviews, and on CFIUS submissions when non-U.S. buyers seek to acquire U.S. businesses that have national security sensitivities.  He also regularly advises clients on international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign merger control regimes.

His knowledge, reputation and extensive experience with the legal, practical, and technical requirements of merger clearance make him a recognized authority on Hart-Scott-Rodino antitrust merger review. John is regularly invited to participate in Federal Trade Commission and bar association meetings and takes on the issues of the day.