A new report from consumer watchdog group Public Citizen, alleges that Amazon engaged in price gouging during the height of the COVID-19 pandemic, and a CNN investigative report concluded that Amazon sold dangerously defective products.
The most alarming accusation made in these 2 reports is that while it is common knowledge defective products have been sold by third party sellers on Amazon and 3rd party sellers are known to price gouge, many of Amazon’s own “white label”(AmazonBasic) products are frequently defective. and Amazon reportedly partakes in price gouging of its own products.
About 60 percent of Amazon’s retail sales take place through the third-party marketplace, with millions of vendors placing tens of millions of listings. At that scale, it can undoubtedly be difficult to keep up, and perhaps some errors are expected, Arstechnica reported.
CNN reported: CNN identified more than 1,500 consumer reviews of AmazonBasics products that described products overheating, burning someone or something, or outright catching fire. About 30 items with “three or more” reviews describing how a product caught fire were still available for sale at the time CNN published its story. Another dozen vanished while CNN’s story was in progress: “Some became unavailable after CNN began its reporting, and at least four product pages were removed from the retailer’s site entirely—leaving behind dead URLs known by employees as ‘dog pages,'” CNN wrote
An AmazonBasics microwave, for example, featured more than 150 user reviews describing “safety concerns, including flames and smoke
Amazon allegedly took advantage of the COVID-19 panic, according to the Public Citizen report.
Price-gouging for some critical goods was just as prevalent in Amazon’s own first-party sales as it was in its vendor marketplace. Between May and August, for example, Public Citizen found that ordinary antibacterial hand soap, which usually sells for around $1.50, was going for $7—a 470-percent price increase, Arstechnica summarized
Arstechnica also reported: Public Citizen’s report includes two instances of markups of 1,000 percent or more: disposable face masks, which were selling for $40 instead of $4, and corn starch, which sold for $9 instead of $0.90. “It is troubling that so much effort was put into blaming third-party sellers, but so little effort was made to stop the price increases—including on the products sold by Amazon directly,” the report concludes. “Amazon is not merely a victim in the price gouging on its marketplace. It is a perpetrator.”