Senators Urge FTC to Punish Coronavirus Price-Gougers

A sign reading ‘Keep This Far Apart’, to remind people of social distancing, is seen in a park on April 15, 2020 in New York City.
A sign reading ‘Keep This Far Apart’, to remind people of social distancing, is seen in a park on April 15, 2020 in New York City.
Photo: Angela Weiss (Getty

Republicans and Democrats disagree on much when it comes to the federal government’s handling of the coronavirus, from how soon the country should “reopen” to how elections should be conducted amid the public health crisis. But on one topic at least they are perfectly in sync: The Federal Trade Commission (FTC) should take immediate action, members of both parties say, to crack down on the “rampant price gouging” of vital consumer health items.

Advertisement

Senators Jerry Moran (R-KS) and Richard Blumenthal (D-CT), the chairman and ranking member of the Subcommittee on Manufacturing, Trade, and Consumer Protection, called on the FTC in a letter Wednesday to finally take action against online retailers who’ve artificially inflated the price of personal protective equipment (PPE), toilet paper, and other essential health and medical products.

“When these basic health products are inappropriately priced, consumers face extreme obstacles to protecting their health—especially as they face new financial pressures and dwindling supply of these types of goods,” the senators wrote. “As the magnitude of the COVID-19 pandemic became apparent, many pro-consumer companies stepped up and devoted considerable resources to the fight. Regrettably, however, some vendors instead sought to take advantage of the crisis through hoarding common, inexpensive products—now in scarce supply—to charge artificially inflated prices.”

Advertisement

According to the letter, the FTC, which has taken some action against pandemic-related scams, has so far done nothing to address price gouging. The lawmakers say it’s unclear to them what precisely the FTC is doing to address the problem.

Reports of price gouging began to surface in early March with stories of single packs of Clorox wipes going for as high as $44. Amazon cracked down in late February, removing more than a million products from its third-party marketplace, as well as items that were falsely presented as having curative properties in connection with covid-19.

The set of laws that empower the FTC, known as the FTC Act, specifically prohibits “unfair or deceptive acts or practices in or affecting commerce.” It enables the agency to seek injunctions putting an end to those practices and even exact “equitable relief” in the form of financial penalties.

“The FTC should be just as vigilant as ever during the COVID-19 pandemic, and while the Defense Production Act and the recent Executive Order signed by the President provide clear authorities to the Department of Justice to pursue criminal enforcement actions against bad actors found to use hoarding as a price gouging tactic related to certain designated critical supplies, we believe that the FTC should provide clarity to the public on what its current enforcement authorities include as it relates to price gouging,” the senators wrote.

Advertisement

The FTC could not be immediately reached for comment.

In partnership with the Food and Drug Administration (FDA), the FTC has been targeting scammers offering products that the sellers claim can stave off the virus. While most haven’t faced any serious blowback, the FDA has created a website that lists companies caught peddling misleading products.

Advertisement

Notably, InfoWars, the website founded by conspiracy theorist Alex Jones, was added to the FDA’s list last Friday after Jones made repeated claims that products he sold, including toothpaste, could protect people from getting infected.

Senior Reporter, Privacy & Security

Share This Story

Get our newsletter

DISCUSSION

Yeah, well at least they wrote a letter. I was afraid they wouldn’t do anything.  This is a big relief.