Amazon sellers under investigation for product prices being inflated by 1951%

Recently, the Attorney General of Kentucky, USA, once again accused Amazon sellers of violating the state's anti-price fraud law during the COVID-19 pandemic.

Product prices were inflated by 1951%

The root cause was that during the epidemic, some sellers sold urgently needed medical supplies on Amazon, including hand sanitizer and N95 respirators. However, when sellers sold these products to consumers, some sellers raised the prices of these items by 1,951%.

The investigation first began in June 2020. The Kentucky Attorney General wanted to investigate price fraud by sellers on the Amazon platform, but was rejected by the CEO on the grounds that the U.S. states have independent jurisdiction and Kentucky's anti-price fraud laws do not apply to other states in the United States . He also banned subpoenas, investigations or prosecutions of Amazon sellers.

In fact, if the investigation continues, it is likely to affect some law enforcement personnel during the COVID-19 pandemic and will require prosecutors between states to restrict online sellers who buy and sell across borders. More deeply, the way this issue is resolved will determine whether the U.S. state constitution will be questioned.

Some judges also said that Amazon itself could be regulated to strictly control the prices of products on its platform because the platform itself is ultimately responsible for determining the prices. However, the fact is that they cannot control the prices set in the market and can only suggest the final set prices of products.

42 U.S. states have price gouging laws or emergency declarations

As of March 2021, 42 states have implemented price gouging laws or issued emergency declarations. While this will push states to uniformly apply price gouging laws, it will inevitably lead to more class-action lawsuits against price gouging laws.

Currently, price gouging laws have been implemented in various states across the U.S., targeting a range of goods, resulting in some sellers being suspended from selling goods and some settlement lawsuits . Some sellers also said that due to the large differences in usage rules between states, they have been forced to accumulate hundreds of thousands of dollars in legal fees.

However, some of the cases investigated were dismissed by the court. It is reported that former Washington State Attorney General McKenna said that if sellers can prove that their price increases are reasonable, there will be no more investigations.

In fact, most price gouging enforcement during the COVID-19 pandemic has fallen into the hands of state law enforcement officials. In September 2020, a New York state judge ruled that a wholesaler doubled the price of Lysol disinfectant spray, arguing that the price increase was unreasonable or overall extreme , triggering a lawsuit.

Amazon’s relationship with politicians in all states is disturbing, and these cases touch on deeper issues. Sellers must be responsible for their products and set reasonable product prices to avoid being held accountable under price gouging laws.

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