Amazon.Com Inc. (AMZN) is asking Congress to pass a strong law against unfairly priced products, a practice known as price gouging, to protect consumers during a public health crisis such as the coronanvirus pandemic or national emergency situations.
“As bad actors seek to profit off the COVID-19 crisis, federal legislation is needed to protect consumers,” said Brian Huseman, who oversees public policy for the Americas at Amazon. “As of now, price gouging is prohibited during times of crisis in about two-thirds of the U.S.”
Huseman, a former consumer protection attorney at the U.S. Federal Trade Commission, added that the online retailer has seen a nationwide surge in complaints about price gouging.
Amazon contended that disparate standards on how price-gouging is defined among states presented a significant challenge for retailers working to support law enforcement, protect consumers, and comply with the law.
A federal price gouging law “would also help retailers like Amazon more effectively prevent bad actors and ensure fair prices.”
Amazon said that it has proactively been seeking out and pulling down unreasonably priced offers and identified unfairly priced products that are now in high demand, such as protective masks and hand sanitizer. In March some sellers charged $400, or more, for a box of small bottles of Purell hand sanitizer, the online retailer said.
In response Amazon removed well over half a million offers from its stores due to coronavirus-based price gouging. It also suspended almost 4,000 selling accounts in its U.S. store alone for violating its fair-pricing policies.
Moreover, Amazon said it has also shared information with federal prosecutors and state attorneys about sellers it suspects to have engaged in egregious price gouging of products related to the COVID-19 crisis.
Shares in Amazon rallied 41% over the past month and were up 0.5% to close at $2,367.92 on Wednesday.
Turning now to Wall Street, analysts have a bullish outlook on the stock. Out of the 41 analysts covering the shares in the last three months, 38 have Buys and the rest are split between 2 Holds and 1 Sell adding up to a Strong Buy consensus. The $2,673.17 average price target still implies 13% upside potential in the shares in the coming 12 months. (See Amazon stock analysis on TipRanks).