Amazon Accused of Price-Gouging During Covid-19 Emergency (1)

April 22, 2020, 1:45 PMUpdated: April 22, 2020, 5:52 PM

Amazon.com Inc. unlawfully increased prices on numerous consumer goods in the wake of the Covid-19 pandemic, in some cases by more than 500%, a new proposed class suit in California federal court alleges.

These increases “are flagrantly unlawful under California penal law, which makes presumptively illegal any price increase exceeding 10% during a state or local emergency,” Victoria Ballinger and Mary McQueen allege in a suit filed in the U.S. District Court for the Northern District of California.

Since the Covid-19 pandemic began, Amazon’s sales in some categories such as home items are up more than 1,000% as worried consumers opt to avoid brick-and-mortar stores, the suit says.

Prices, too, spiked after California officials declared Covid-19 a public health emergency, the suit alleges.

For example, the price face masks jumped by more than 500%, from less than $20 to $120; pain reliever saw increases of 233%, from $18.75 to $62.40; and cold remedies jumped by up to 674%, from $4.65 to $35.99, the plaintiffs say.

Food items, too, saw dramatic increases, with black beans up to 672%, from $3.17 to $24.50; and flour jumping by up to 400%, from $22 to $110, the complaint says.

The anti-gouging law applies to “protected products” such as consumer food items, emergency supplies, medical supplies, and building materials.

The pricing violations give rise to claims under California’s Unfair Competition Law, plaintiffs say.

Unlawful increases occurred on sales of products supplied by third parties as well as on Amazon’s own products, the suit says. Amazon is the functional seller of third-party products and is responsible when price-gouged sales violate the law, the suit says.

Cause of Action: California Unfair Competition Law; negligence and negligence per se; unjust enrichment.

Relief: Damages; restitution; public injunctive relief; punitive damages; attorneys’ fees and costs.

Class Size: Unknown number of individuals in California who bought any protected product on Amazon.com on or after Feb. 4, 2020, at a price 10% greater than the price charged on Amazon.com for the same product on Feb. 2, 2020, or immediately before any declaration of a state of emergency relating to the Covid-19 crisis.

Response: Amazon declined to comment on the lawsuit, but a company spokesperson said, “There is no place for price gouging on Amazon and that’s why our teams are monitoring our store 24/7 and have already removed tens of thousands of offers for attempted price gouging.”

In addition, Amazon is terminating accounts and working directly with state attorneys general “to prosecute bad actors and hold them accountable,” the spokesperson said.

Attorneys: Hagens Berman Sobol Shapiro LLP represents the plaintiffs.

The case is McQueen v. Amazon.com, Inc., N.D. Cal., No. 4:20-cv-02782, complaint 4/21/20.

(Updated with Amazon's response)

To contact the reporter on this story: Julie Steinberg in Washington at jsteinberg@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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