How Amazon raised prices to profit from the pandemic

by Alex Harman

Part 5 - Amazon Points Fingers in Response to Reports of Price Gouging

In the early days of the COVID-19 pandemic, the first reports of price gouging on Amazon began to surface. In response, the company blamed the high prices on third-party sellers calling them “bad actors.” Amazon declared that “there is no place for price gouging on Amazon.” The company pointed to its so-called “Fair Pricing Policy,” which prohibits “setting a price on a product or service that is significantly higher than recent prices offered on or off Amazon,” and promised that those who violate the policy will be removed from the retail platform.

Amazon’s vice president of public policy then touted to the public that the company had turned over information about third-party sellers engaged in price gouging to 42 state attorneys general, as well as federal prosecutors. Amazon CEO Jeff Bezos used the same talking points in his shareholder letter, in which he declared “Amazon is acting aggressively to protect our customers from bad actors looking to exploit the crisis.”

With all the public proclamations and protestations by Amazon that they were cracking down on price gouging from the very beginning of the public health crisis, one would expect that the price gouging problem would have been addressed and stopped. Amazon, in its own publications, claimed to have removed half a million listings and suspended 6,000 sellers. Some have even claimed that this widespread crackdown led to shortages on the platform when other sellers removed listed items for fear of violating a pricing policy that was unclear.

Unfortunately, it is not like this has not happened before. About two years earlier, during Hurricane Irma, Amazon was alerted to price gouging on bottled water and other essential goods, took no action to address the problem, and encouraged customers to contact customer service if they have a complaint. Instead of implementing a solution to this problem it has known about for years, Amazon coordinated a public relations campaign attempting to wash its hands of price gouging, laying the blame on third-party sellers all while it got undeserved credit for protecting consumers. It is implausible to think third-party sellers on the most sophisticated online marketplace in history actually raised prices in violation of a written policy without Amazon noticing. And as this report demonstrates, price gouging has continued on Amazon.

Source, links, references:

https://www.citizen.org/article/prime-gouging/

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