Amazon

As a major e-commerce platform that sees 197 million global visitors visit daily, Amazon has been a critical supplier of household and medical goods for families wanting to employ responsible social distancing.¹ However, as the pandemic has spread, thousands of sellers engaging in price gouging flooded the platform with high-priced listings. In early March, in response to reports of price gouging, Amazon shared it had removed 530,000 offers from the marketplace and suspended more than 2,500 seller accounts in its U.S. marketplace for violating its price-gouging policies.² By the end of March, Amazon stated that it took down 3,900 selling accounts from the U.S. store alone for violating its fair pricing policies.³ Further, in a response to a letter sent by Sen. Ed Markey (D-Mass.) on this topic, the company explained that it uses machine learning models, in part, to detect price gouging, but has recently stepped up human monitoring as price gouging has spread in light of the coronavirus.⁴ Amazon is now deploying “an additional dedicated team” that’s working “24 hours, seven days a week” to spot price gouging on items such as protective masks and hand sanitizers.⁵

During the pandemic, misleading information has spread on Amazon primarily through product listings that make false claims, often related to cures or treatments for the virus. The company’s Prohibited Product Claims for Diseases policy states, “Amazon prohibits the sale of products that claim to cure, mitigate, treat, or prevent diseases in humans or animals without FDA approval.”⁶ The list of examples of diseases that products cannot claim to cure includes “Coronavirus and/or COVID-19.”⁷ In February, the company notified third-party merchants that it was taking down listings for items claiming to be a treatment, cure, or remedy for the coronavirus.⁸ After that notice, the company confirmed that it blocked or removed more than 1 million products for suspect or misleading claims.⁹ While Amazon has told sellers it would remove their listings for making unapproved medical marketing claims, the company has given sellers the opportunity to keep their valid product up without the prohibited medical claims.¹⁰

Given that Amazon has emerged as a crucial platform during the pandemic, the company needs to provide greater transparency and accountability around its operations during this time. In particular, Amazon should publish periodic updates during the pandemic outlining the number of listings the company has taken down and the number of sellers the company has banned for violating COVID-19 specific policies. Following the pandemic, the company should publish a comprehensive COVID-19 transparency report outlining the scope and scale of these enforcement actions more broadly. It should also expand this reporting to cover non-emergency periods. In addition, where appropriate, the Federal Trade Commission (FTC) should enforce Section (5)(a) of the Federal Trade Commision Act of 1914 and hold businesses accountable when they engage in unfair and deceptive trade practices on the platform.

Another issue Amazon has faced as the pandemic has spread worldwide is that “essential” goods such as face masks, cleaning products, and hand sanitizers rapidly sold out, leaving those who needed the items the most, like medical workers, without access to such supplies. In mid-March, to keep up with surging demand for essential goods, Amazon announced that it would no longer accept other items at its warehouses until April 5.¹¹ This decision had immediate impacts on third-party sellers and vendors who came to rely on Amazon’s warehouse to get their products into the hands of consumers. By April 13, Amazon began allowing sellers to start shipping nonessential items again.¹²