Class-action lawsuit accuses Amazon of ‘exploiting consumers in their most vulnerable hour’ through price gouging during the pandemic

The COVID-19 pandemic will fuel several parts of Amazon’s business, from e-commerce to advertising, wrote Benstein analyst Mark Shmulik. REUTERS / Kim Kyung-Hoon / File Photo

  • A lawsuit filed in California claims that Amazon increased prices by up to 1,000% during the pandemic.

  • “Some of the unlawful increases were in sales of products supplied by third parties, sales that Amazon controls and that generate huge profits,” the lawsuit said.

  • Consumers attempted to purchase groceries and supplies from Amazon while adhering to stay-at-home orders, the lawsuit said.

  • Check out Insider’s business page for more stories.

One lawsuit accuses Amazon of “exploiting consumers in their weakest hour” by increasing the prices of medical items, detergents, canned goods and other necessary supplies during the coronavirus pandemic.

The class action lawsuit has now expanded to potentially all Amazon buyers in the US who have purchased such products, the law firm Hagens Berman said on Friday.

According to the lawsuit, at the height of the coronavirus pandemic in spring 2020, American consumers turned to Amazon and other online retailers when home-stay orders and the threat of the disease made it difficult to buy much-needed food and supplies.

“In this environment – in line with government and public health instructions – consumers have understandably turned to online shopping, and Amazon in particular, to meet their essential needs,” the lawsuit said. “Without venturing out in public and risking themselves and others, Americans can buy consumer goods from Amazon with just a few clicks and have them delivered to their homes.”

Amazon didn’t immediately respond to a query from Insider asking about the lawsuit.

The lawsuit alleges that the e-commerce giant significantly increased the prices of various goods. For example, the cost of face masks rose 500% from $ 20 to $ 120, according to the lawsuit. Disinfectant costs increased 100%, according to the lawsuit, while the cost of a common stock item such as black beans increased 672%. Other items whose costs have increased dramatically on Amazon were pain relievers, flour and cold medicines, according to the lawsuit.

The story goes on

The complaint, which was first filed in the Northern District Court in California in April 2020, states that some points have increased by as much as 1,000%.

“Some of the unlawful increases were in sales of products supplied by third parties, sales that Amazon controls and that generate huge profits,” the lawsuit said.

While there is no federal law explicitly making price gouging illegal, many states have banned the practice during an emergency such as a natural disaster or pandemic.

“Amazon is the functional seller of these products and is responsible if price-driven sales violate the law. In addition, Amazon has inflated the prices of its own product inventory that Amazon delivers and sells directly to consumers,” the complaint said.

Amazon said in May that Congress should pass federal anti-price gouging law to create a clear standard and definition.

Hagens Berman posted a call on its website asking people who have bought from online retailers during the COVID-19 pandemic to describe their experience.

“Unfair price gouging may have made you pay more,” the appeal said, calling on consumers to fill out a form “to find out your consumer rights to possible compensation”.

Last March, Amazon said it removed nearly 4,000 individual sellers for price gouging during the pandemic.

But months after the pandemic, sellers continued to charge up to 14 times more than other retailers for normal household products like soap and hand sanitizer.

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