Politics

Amazon's been under fire over price gouging. Here's why it wants a federal ban.

Lawmakers could help Amazon and other ecommerce platforms enormously, as long as they hew to the companies' wishes.

Purell

Under pressure over jacked-up prices on Purell and other pandemic mainstays on its platform, Amazon is pushing for federal price-gouging legislation.

Photo: Nicholas Kamm/AFP via Getty Images

Amazon did something Wednesday that companies typically only do when they're desperate: It called for the government to regulate its business. On the company's COVID-19 blog, top lobbyist Brian Huseman called for Congress to pass a national price-gouging law to crack down on the swell of marked-up Purell and other excessively priced items circulating the web amid the pandemic — a problem that has has dogged Amazon's platform.

"Amazon stands ready to work with Congressional leaders," Huseman wrote, noting that Amazon has removed more than half a million items listed by alleged gougers. "A federal price gouging law would … help retailers like Amazon more effectively prevent bad actors and ensure fair prices."

It may seem counterintuitive, but federal price-gouging legislation may be a big opportunity for Amazon in this year of coronavirus and the election. It could benefit the company and potentially other ecommerce platforms enormously — so long as Congress hews to Huseman's criteria.

Amazon and platforms like eBay and Facebook Marketplace could benefit from legislation that preempts the dizzying array of state price-gouging laws dominating the regulatory landscape today and replaces it with one standard. More than 30 states have price-gouging laws on the books, but there are vast differences among them — and some are much tougher on online platforms than others.

If a bill were to override state laws, "There would be only one legal regime that really controlled their transactions," said Jason Levine, a business litigation and trial partner at Alston & Bird LLP, a firm that has counted Amazon, Microsoft and other tech companies as clients. He said federal price-gouging legislation could help "any large company involved in interstate sales."

Jamie Court, the president of Consumer Watchdog, cautioned that state laws can yield stronger consequences for scammers because "price gouging tends to happen regionally." Under Amazon's plan, enforcement authority would be kicked to the Federal Trade Commission and state attorneys general.

And ecommerce companies could avoid significant lawsuits if Congress heeds Amazon's advice to only hold sellers liable for price gouging, rather than the platforms that host their products.

Grace Brombach, an associate with the U.S. Public Interest Research Group, a liberal policy outfit, said that under a national standard like the one laid out by Huseman, "Amazon still can't be held liable." Currently, most state laws do not allow individuals to sue internet platforms for hosting price-gouged items. Amazon's plan could ensure that it stays that way.

Amazon is also seeking to ensure that consumer protection doesn't go too far. "It's critical federal legislation take into account the fact that actual costs for businesses — including supply, transportation and labor costs — can increase during an emergency," Huseman wrote. He said the company does not want to punish "unavoidable price increases" during an emergency that triggers price-gouging rules.

Since COVID-19 hit, top ecommerce companies have taken voluntary steps to remove listings of items with prices that skyrocketed due to low supply and high demand, such as face masks and hand sanitizer. Amazon said it has poured significant resources into weeding out overpriced items, booting 4,000 seller accounts to date, while sharing tips on criminals with state attorneys general.

EBay said it has a "zero-tolerance" price-gouging policy and has instituted a "price freeze" for items deemed critical during the pandemic. Facebook said it removes "ads and commercial listings" for face masks and hand sanitizer.

But scrutiny of the platforms' roles in disseminating and profiting from overpriced goods has increased. This month, a California woman sued eBay, accusing it of encouraging sellers to jack up the price of masks.

In March, Florida Attorney General Ashley Moody announced she had subpoenaed records from 40 Amazon sellers in a price-gouging investigation. Also that month, a group of 32 attorneys general wrote to Amazon, Walmart, Facebook and eBay, saying they were failing "to remove unconscionably priced critical supplies during the COVID-19 pandemic."

Now there's reinvigorated energy in Congress to pass emergency price-gouging legislation as part of a larger economic stimulus package — if only an agreement can be reached on the particulars. The legislation, announced as part of Democrats' $3 trillion COVID-19 relief proposal this week, would give the FTC authority to pursue price gougers, which the agency currently claims it does not have. However, the Democratic proposal would not override state laws.

As Amazon works to shape the contours of any price-gouging bill that ultimately gets passed, the struggle echoes the debate over federal privacy legislation. Many tech companies have come out in support of passing such a law, albeit on their own terms. "I think the idea is, if you don't get on board the train now, it'll run you over," Court said. "I think that's what most of the big companies are going to try to do."

EBay, Walmart and Craigslist did not immediately respond to requests for comment Wednesday. Facebook declined to comment. But Brombach said it's safe to assume that more ecommerce companies will come out in support of favorable legislation. "I'd absolutely say that Amazon is setting the tone," she said, "and other online marketplaces are likely to follow."

Enterprise

UiPath had a rocky few years. Rob Enslin wants to turn it around.

Protocol caught up with Enslin, named earlier this year as UiPath’s co-CEO, to discuss why he left Google Cloud, the untapped potential of robotic-process automation, and how he plans to lead alongside founder Daniel Dines.

Rob Enslin, UiPath's co-CEO, chats with Protocol about the company's future.

Photo: UiPath

UiPath has had a shaky history.

The company, which helps companies automate business processes, went public in 2021 at a valuation of more than $30 billion, but now the company’s market capitalization is only around $7 billion. To add insult to injury, UiPath laid off 5% of its staff in June and then lowered its full-year guidance for fiscal year 2023 just months later, tanking its stock by 15%.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Workplace

Figma CPO: We can do more with Adobe

Yuhki Yamashita thinks Figma might tackle video or 3D objects someday.

Figman CPO Yuhki Yamashita told Protocol about Adobe's acquisition of the company.

Photo: Figma

Figma CPO Yuhki Yamashita’s first design gig was at The Harvard Crimson, waiting for writers to file their stories so he could lay them out in Adobe InDesign. Given his interest in computer science, pursuing UX design became the clear move. He worked on Outlook at Microsoft, YouTube at Google, and user experience at Uber, where he was a very early user of Figma. In 2019, he became a VP of product at Figma; this past June, he became CPO.

“Design has been really near and dear to my heart, which is why when this opportunity came along to join Figma and rethink design, it was such an obvious opportunity,” Yamashita said.

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

Climate

Microsoft lays out its climate advocacy goals

The tech giant has staked out exactly what kind of policies it will support to decarbonize the world and clean up the grid.

Microsoft published two briefs explaining what new climate policies it will advocate for.

Photo by Jeremy Bezanger on Unsplash

The tech industry has no shortage of climate goals, but they’ll be very hard to achieve without the help of sound public policy.

Microsoft published two new briefs on Sept. 22 explaining what policies it will advocate for in the realm of reducing carbon and cleaning up the grid. With policymakers in the U.S. and around the world beginning to weigh more stringent climate policies (or in the U.S.’s case, any serious climate policies at all), the briefs will offer a measuring stick for whether Microsoft is living up to its ideals.

Keep Reading Show less
Brian Kahn

Brian ( @blkahn) is Protocol's climate editor. Previously, he was the managing editor and founding senior writer at Earther, Gizmodo's climate site, where he covered everything from the weather to Big Oil's influence on politics. He also reported for Climate Central and the Wall Street Journal. In the even more distant past, he led sleigh rides to visit a herd of 7,000 elk and boat tours on the deepest lake in the U.S.

Climate

The next generation of refrigerants is on the way

It’s never been cooler to reconsider the substances that keep us cool. Here’s what could replace super-polluting greenhouse gases in refrigerators and air conditioners.

It’s incumbent on refrigeration tech companies to not repeat past mistakes.

Photo: VCG via Getty Images

In a rare display of bipartisan climate action, the Senate ratified the Kigali Amendment last week. The U.S. joins 137 other nations in the global effort to curb the use of hydrofluorocarbons, or HFCs. Now the race is on to replace them for climate tech startups and traditional HVAC and refrigeration companies alike.

Most HFCs have a global warming potential (GWP) more than 1,000 times that of carbon dioxide — though some are as much as 14,800 times more potent — which makes reducing them a high priority to protect the climate. The treaty mandates that the U.S. and other industrialized nations decrease their use of HFCs to roughly 15% of 2012 levels by 2036.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Latest Stories
Bulletins