eBay Hit With Price-Gouging Lawsuit

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.

2 comments about "eBay Hit With Price-Gouging Lawsuit".
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  1. susie jgs, May 10, 2020 at 4:17 p.m.

    I have complained to ebay about various sellers with items that they consider price gouging but sellers have not been taken down and they have sold 600 sets of 2 bottles of alcohol and 96 set of sanitizers when most of us cant find one to buy, also some of theses listings are being sponsored meaning ebay is getting even more money on the sale of these items, i complained over one week ago and yet the 2 sellers who are not only price gouging but hoarding are still selling and relisting the same items over and over.

  2. Jorge Sanchez replied, May 24, 2020 at 2:10 p.m.

    This is insane.... FIRST OFF Unless the person is in your city or state they are not taking any items away from you. All of the manufactures sent the products where they were needed most... So not one person selling on ebay took a product that you would have purchased off of the shelf... If you want to get technical that person on ebay would have had to purchased these items at your favorite store in order for you to have missed out on an item...I doubt this happened.

    If anything they are taking from where there is a surplus and helping to redistribute that happens all the time during Christmas and in other industries on a daily basis. I hope you don't like baseball cards because that would be price gouging... Did you buy a Beanie Baby?? Shame shame that was gouging...

    But hey lets do some quick math.... At CVS a can of Lysol is $8.xx with tax lets say it comes out to 9.50. Cost on that item for an ebay seller is $9.50, most retailers have 2x-4x average markup over cost on the items you buy daily.

    Ok that can of Lysol $9.50 we will take the median profit margin after all you had to drive around from cvs to cvs buying one maybe 2 cans at a time, (some stores being sold out, and that stop produces no Lysol...). and we have $28.50 selling price for a guy on ebay. The only way to ship one 19oz can of lysol without breaking any rules is UPS $10.50 now your are at $39 factor in ebay and PayPal fees you are at $44.00-$46.00. I fail to see the price gouging. The people on ebay can't buy lysol from lysol. Its one man in his living room trying to feed his family. This is standard retail margin...not price gouging..... How about this yesterday I was in Walmart. 50 ear loop masks prior to the pandemic were $6-$7 retail. YESTERDAY AT WALMART 50 MASKS WERE $29.99. But hey it's too hard to pick on Walmart. So just attack the little guy trying to carve out a living to feed his family....

    The thing you have an issue with is basic economics its called supply and demand.... Our entire system is built on it. Maybe you prefer communism?? I don't know. Do your water rates at your house go up during a drought? Probably more than 10%.... hmmmmmmmmmmmmm

    oh one last thing YOU DON'T HAVE TO BUY IT... You wouldn't have it anyways because your local store is out. Classic example of people should mind their own business. Just click the little x in the upper corner or swipe up on your iOS device and guess what it all goes away...

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