Attorney General Gurbir Grewal Demands More Accountability for Online Marketplaces

Attorney General Gurbir S. Grewal joined a coalition of 31 other Attorneys General calling for more accountability among the nation’s online marketplaces as they protect American consumers from pricing gouging amid the coronavirus pandemic.

The coalition sent letters to Facebook, Amazon, Walmart, eBay, and Craigslist, arguing it was “especially important” the platforms help protect consumers from unscrupulous sellers who were seeking to capitalize on the current public health emergency.

The coalition argued the companies had to do more to protect customers during the crisis. Although the companies individually took various steps to address price gouging on their platforms, problems continued to exist.

More Shopping Online

“Stay-at-home and social-distancing policies are leading more and more consumers to shop online,” said Attorney General Grewal. “It is essential that online marketplaces that are benefiting from this public health crisis—while our residents and the brick-and-mortar stores in our communities struggle—do everything they can to prevent sellers from preying on consumers by charging inflated prices.”

The Attorney General called on the operators to restrict third-party sellers from hiking prices well above those being charged before an emergency. Currently, operators allow sellers to increase prices, acting only when complaints are issued.

Price Controls Needed

Additionally, the letter called for the companies to adopt controls so prices hikes can be stopped before a state of emergency is declared.

New Jersey’s Division of Consumer Affairs reported 1,500 consumer complaints at about 1,000 businesses in connection with price hikes. Items reported included surgical masks, hand sanitizer, disinfectant sprays and wipes, bottled water, food, and other items.

“In New Jersey, charging exorbitant prices for essential items during a declared state of emergency is not only unconscionable, it’s illegal,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “Whether you operate a major online marketplace or run a corner store, we expect you to obey the laws in place to ensure that all New Jersey residents have access to critical supplies during this nationwide health crisis.”

Division inspectors have only had the ability to conduct about 300 inspections to date, with 75 more completed by consumer protection offices around the state. The division issued 167 cease-and-desist letters and served 32 subpoenas as of March 25.

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