The coalition, led by Pennsylvania's Democratic Attorney General Josh Shapiro, sent a letter to the companies saying they "have an ethical obligation and patriotic duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real-time." Attorneys general from California, Colorado and the District of Columbia were among those involved in the effort.
The letter acknowledged that the tech platforms have already taken steps to remove some of the overpriced products from their sites but said consumers were already harmed by their presence. The attorneys general urge the companies to take proactive measures to prevent price gouging on their sites, "[r]ather than playing whack-a-mole."
The attorneys general pointed to examples of price gouging on several of the platforms identified by the U.S. Public Interest Research Group Educated Fund and news reports. On Amazon, they wrote, U.S. PIRG found over half of the available hand sanitizers and face masks spiked at least 50% compared with the average price after the World Health Organization declared a global health emergency on Jan. 30. On Craigslist, a two-liter bottle of hand sanitizer was listed for $250, or ten times the standard price, the letter said, citing The Atlantic. On Facebook's marketplace, an eight-ounce bottle of hand sanitizer was going for $40, the letter said, citing a Washington Post report.
They advised the companies to take on strong policies that deter price gouging, trigger protections from price gouging outside of the case of an emergency and maintain a way for consumers to report potential violations.
Amazon has taken steps to punish sellers on its platform that have sought to profit off fear-induced buying during the COVID-19 crisis. The company told Sen. Ed Markey, D-Mass., earlier this month that it removed more than half a million "high-priced offers" from its marketplace and suspended 2,500 seller accounts in its U.S. marketplace for violating its policies on price gouging.
Both Amazon and eBay told sellers it would block new listings for face masks and hand sanitizer in an effort to stop further exploitation. Similarly, Facebook has banned ads and listings for face masks on its social media platform and marketplace.
A Walmart spokesperson previously told CNBC the company is monitoring the site for unsubstantiated medical claims and taking down listings with inflated prices.
State AGs have taken a particularly active interest in tech companies over the past year. Attorneys general from 50 states and territories are involved in an antitrust probe into Google, and nearly as many are part of a similar probe into Facebook. The Federal Trade Commission is reportedly looking into Amazon's competitive practices as well, though it has not confirmed an investigation.
"Facebook is focused on preventing exploitation of this crisis for financial gain.Since COVID-19 was declared a public health emergency, Facebook has removed ads and commerce listings for the sale of masks, hand sanitizer, surface disinfecting wipes and COVID-19 test kits," a spokesperson said in a statement to CNBC. "While enforcement is not perfect, we have put several automated detection mechanisms in place to block or remove this material from our platform."
An Ebay spokesperson said in a statement, "Like so many companies, we have been closely monitoring the coronavirus pandemic as it continues to develop. As always, our first priority is to ensure the safety of our employees and customers around the world. eBay is taking significant measures to block or quickly remove items on our marketplace that make false health claims. We are making every effort to ensure that anyone who sells on our platform follows local laws and eBay policies."
Representatives from Craigslist were not immediately available to comment. An Amazon spokesperson did not provide comment on the letter and pointed to an earlier blog post on price gouging. A spokesperson for Walmart did not provide comment but pointed to letters the company sent to the Democratic and Republican Attorneys General Associations last week outlining its price gouging policies, how its monitoring medical claims on products and how it's cleaning its stores.