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Testimony on AG price gouging regs
294 Washington St
Boston MA 02108
June 10, 2020
Office of the Attorney General
One Ashburton Place
Boston MA 02108
RE: Testimony in support of the permanent adoption of the Office of Attorney General’s emergency price gouging amendment to 940 C.M.R 3.18, promulgated on March 20, 2020
MASSPIRG fully supports the permanent adoption of the Office of Attorney General’s emergency price gouging amendment to 940 C.M.R 3.18, promulgated on March 20, 2020
The amendment to the price gouging regulations (940 CMR 3.18) makes it an unfair and deceptive practice for any business to sell or offer for sale to any consumer or business any goods or services necessary for the health, safety or welfare of the public for an unconscionably high price during a declared statewide or national emergency. Previously, the only existing regulation related to price gouging addressed the sale of gasoline and other petroleum products. The amended language will not only protect consumers from excessive prices during a crisis when one might have limited resources, but will also protect our health as many products are needed for our wellbeing, and in the case of a pandemic – to stop the spread of the disease.
Further, the amended price gouging regulations defines when the price is considered “unconscionably high” similar to that for price gouging for petroleum, a gross disparity between the price charged compared to prices before the onset of a national or statewide emergency. And, provided the disparity in increase in prices charged is not substantially a result of increased costs due to the abnormal market disruption.
The COVID-19 pandemic has illustrated the need for this updated price gouging regulation. As the virus spreads throughout the country, it is especially important that unscrupulous sellers are not able to take advantage of consumers. MASSPIRG, along with other independent organizations and journalists, have documented multiple examples of price-gougingof items people need to protect themselves since the World Health Organization declared a global health emergency on January 30.
Over the last 12 weeks the attorney general’s office has reported receiving at least 497 price gouging complaints, half of them related to personal protective equipment (PPE). Those complaints came from consumers and hospitals and were made against 178 different vendors.
In March, MASSPIRG found significant price hikes for products like hand sanitizer, facemasks, and thermometers for sale on Amazon.com. In fact, we have worked with 33 AG’s, including Attorney General Maura Healey and 346 lawmakers (including 25 lawmakers from MA) to call on the 5 largest online retailers – Amazon, Craigslist, eBay, Facebook, and Walmart to quickly implement preventative measures on their platforms to ensure that consumers don’t get taken advantage of in a state of emergency.
Examples of price gouging we found include:
-On Amazon, MASSPIRG Education Fund found that more than half of hand sanitizers and facemasks available spiked by at least 50% compared to the average price. One in six products sold directly by Amazon saw similar price spikes.
-On Craigslist, someone was selling a two-liter bottle of Purell Advanced hand sanitizer for $250--ten times the normal price.
-On Facebook Marketplace, an eight-ounce bottle was being sold for $40.
The bottom line is that if the price of something skyrockets during a crisis – or in anticipation of one - it’s price gouging. Whether it’s COVID 19, a tornado, hurricane or blizzard, businesses should not jack up their prices just because people are vulnerable. –That is wrong, and we support the attorney general’s efforts to stop it from happening
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