Open Letter to State Attorneys General: Legal Flaws Against Amazon Merchants

The Online Merchants Guild recently published an open letter to the State Attorneys General. The letter explains why each state is legally required to hold Amazon accountable for price-gouging, as it is Amazon’s store, not the merchants’. Continue reading →

Apr 18, 2020 /prREACH/ -- The Online Merchants Guild (OMG), a trade association for eCommerce businesses, recently published an open letter to State Attorneys General criticizing states for failing to hold Amazon accountable for price gouging when it was legally their responsibility to prevent it. "As the letter discusses, the laws are being misapplied as only Amazon can be held liable for price-gouging, not the merchants who lack the ability to control prices on a state by state basis," says Paul Rafelson, OMG's Executive Director.

More information can be found at https://onlinemerchantsguild.org/

As highlighted in the letter, Amazon's actions include:

• Failure to take swift action to prevent panic pricing by shutting off Application Protocol Interface access for automatic repricing tools.
• Misleading merchants who were listing at the lowest price using Amazon's match-lowest price-option.
• Failing to proactively prevent high prices by imposing emergency price ceilings by product category.
• Sudden refusal to routinely deactivate listings in their store with high prices, known as pricing errors.

Rafelson also points out how Amazon did not take obvious steps to prevent high prices from going live during the start of the COVID-19 pandemic. "Amazon knew there was panic and that there was a potential for price gouging months ago. Yet, despite being in the only position to prevent $700 toilet paper from ever appearing on its website, causing our national economy to panic online and in-store, Amazon chose to profit from the 15-30% markup it charges (in the form of a commission), knowing it had the perfect scapegoat — its merchants."

Rafelson wants to make it clear that OMG is prepared to take action to protect sellers. "By focusing on the merchants, instead, states are highlighting a severe constitutional flaw with these laws. If the states don't back off and focus their investigation on the real culprit, Amazon, that's where we intend to go," he said.

For more information about the Online Merchants Guild, please visit its official website.

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