A California resident is suing eBay for allegedly encouraging sellers on its platform to hike the price of masks, hand sanitizer, disinfectants and other products that can help combat COVID-19.
“Unscrupulous sellers opportunistically prey upon the public by gouging prices of essential items ... to unconscionably profit off of vulnerable and fearful consumers during these unprecedented times,” Jeanette Mercado of Orange County alleges in a class-action complaint brought this week in federal court in San Jose, California.
She adds that eBay's business model “not only allows but encourages” price gouging, because the company's fees often are based on the sales price.
“eBay’s business model incentivizes it to turn a blind eye to price gouging in most cases: in addition to charging fees for initially listing items, eBay charges a 'final value fee' when items actually sell, which is calculated as a percentage of the total amount of the sale,” the complaint alleges. “Thus, the higher the sale price, the more profit eBay stands to earn.”
An eBay spokesperson says the company has “taken significant measures to block or quickly remove items from our marketplace that are unsafe, make false health claims or violate our zero-tolerance price gouging policy.”
The spokesperson adds: “We are making every effort to ensure that anyone who sells on our platform follows local laws and eBay policies.”
Mercado, who says she works as a driver with ride-sharing companies, alleges she purchased a two-pack of n95 masks on eBay for $23.98 on March 14 -- a figure she says reflects a nearly 300% markup from other national retailers.
She alleges that sellers are offering other “essential” products, such as disinfectant, for “exorbitant and unconscionable prices.”
Her complaint includes a screenshot of a 19-ounce can of Lysol offered for $45.49 on the site, and of a package of 12 "mega rolls" of toilet paper offered for $49.90.
California's price-gouging law generally restricts companies' ability to raise prices by more than 10% after the declaration of a state of emergency. Governor Gavin Newsom declared a state of emergency on March 4, while Santa Clara County declared one on February 3.
eBay isn't the only online commerce platform facing price-gouging claims. Late last month, two California residents brought a class-action complaint against Amazon over alleged price hikes.