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Class-action lawsuit accuses Amazon of 'exploiting consumers in their most vulnerable hour' through price gouging during the pandemic
ydzhanova@businessinsider.com (Yelena Dzhanova) 

The COVID-19 pandemic stands to boost multiple parts of Amazon's business, from e-commerce to advertising, Benstein analyst Mark Shmulik wrote. 

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A lawsuit filed in California says Amazon hiked up prices by as much as 1,000% during the pandemic.

"Some of the unlawful increases were on sales of products supplied by third parties, sales which Amazon controls and reaps huge profits from," the lawsuit says.

Consumers tried to buy food and supplies from Amazon while adhering to stay-at-home orders, the lawsuit says.

A lawsuit accuses Amazon of "exploiting consumers in their most vulnerable hour" by hiking up prices on medical items, cleaning products, canned food and other necessary supplies during the coronavirus pandemic.


The class-action lawsuit has now expanded to potentially include all Amazon shoppers across the US who purchased such products, the law firm Hagens Berman said on Friday.

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

"In this environment-consistent with the directions of government and public health officials-consumers have understandably turned to online purchasing, and Amazon in particular, to fulfill their essential needs," the lawsuit says. "Without venturing into public and risking exposure to themselves and others, with just a few clicks Americans can purchase consumer goods from Amazon that will be delivered to their homes."

Amazon did not immediately reply to a request for comment from Insider asking about the lawsuit.

The lawsuit alleges the e-commerce giant significantly hiked up prices of various goods. The cost of face masks, for example, jumped 500%, the lawsuit alleges, from $20 to $120. Disinfectant cost went up by 100%, the lawsuit says, while the cost of an ordinary staple pantry item like black beans went up by 672%. Among other items whose costs drastically went up on Amazon were pain relievers, flour, and cold remedies, according to the lawsuit.

The complaint, first filed in April 2020 in California's Northern District Court, says some items went up by as much as 1,000%.

"Some of the unlawful increases were on sales of products supplied by third parties, sales which Amazon controls and reaps huge profits from," the lawsuit says.

Though there is no federal law explicitly making price-gouging illegal, many states have outlawed the practice during an emergency, like a natural disaster or pandemic.

"Amazon is the functional seller of these products and is responsible when price-gouged sales violate the law. But in addition, Amazon has inflated prices on its own inventory of products, which Amazon supplies and sells directly to consumers," according to the complaint.

Amazon in May said Congress should pass a federal law against price gouging to make one clear standard and definition.

Hagens Berman put out a call on its website asking people who've purchased from online retailers during the COVID-19 pandemic to describe their experience.

"Unfair price gouging may have caused you to pay more," the call says, directing consumers to fill out a form "to find out your consumer rights to potential compensation."

In March of last year, Amazon said it removed almost 4,000 individual sellers for price gouging during the pandemic.

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