Amazon tried to clear up confusion on Wednesday about what triggers the company to suspend sellers for price gouging during the current COVID-19 pandemic. Amazon and other online marketplaces are under pressure from regulators, lawmakers, and consumers alike to keep sellers from listing essential goods at excessive prices during the public health crisis.
The public pressure is fueled by news reports showing severe shortages of protective gear (PPE) for healthcare workers.
On the other hand, some sellers say Amazon is targeting their offers despite being priced the same or less than Amazon's own product offers.
In a post on Seller Central, Amazon said it considers state laws when assessing price gouging, but that those laws vary.
"Amazon's Marketplace Fair Pricing Policy protects our customers from unfair, excessive, and misleading prices. We recognize there may be some confusion as to what may trigger offer removal or account suspension for price gouging under this policy," it wrote.
It explained how it looks to ensure sellers comply with state laws, writing:
"While state price gouging laws vary, in general they look to the average sale price (ASP) of an item preceding a state of emergency and prohibit price increases over that ASP due to the emergency. Some states cap those price increases at fixed amounts (10%, for example) while others prohibit "unconsciously excessive" price increases without a fixed cap. Many permit exceptions when the seller can show that the increase is due to the increased costs of goods, freight, or labor.
"Our systems attempt to account for these variations in state law while recognizing that the costs of many goods are increasing due to the worldwide effects of the COVID-19 pandemic. As a starting point, we look at the ASP of the product (excluding any offers that are excessive) as well as the prevailing prices of the product."
Some sellers have expressed frustration about Amazon's enforcement of the
Marketplace Fair Pricing Policy, and Wednesday's announcement did not assuage everyone's concerns. One seller said Amazon's enforcement of the policy is actually keeping sellers from listing essential goods out of fear of getting suspended.
"We would happily stock products that customers need, but we don't know what price we have to price at or below to not trigger Amazon's arbitrary and confusing algorithm," the seller wrote. "Your Algorithm is harming customers. Give us guidance. This announcement is so arbitrary and not tactile advice."