They’ve become the iconic symbol of a spreading epidemic. As the world struggles to contain the Covid-19 coronavirus disease, social media and news sites have flooded with pictures of people donning protective masks while they go about their daily lives, making city streets and shopping malls look more like hospitals. Mask shortages are now affecting some countries, and suppliers are working overtime to keep up with demand. On Amazon, prices for the devices have sharply increased in recent weeks, and the company has warned sellers not to raise them to exorbitant levels—or risk getting kicked off the site.
Amazon has alerted merchants about face masks that are “not in compliance” with its pricing policies, according to an email provided to WIRED. One consultant who works with Amazon sellers said that listings for overpriced face masks had been deleted from the site. The topic of “coronavirus and price gouging” has also been hotly debated among users on Amazon’s official selling forum over the past week. In a statement sent after publication, a spokesperson for Amazon said the company was “disappointed that bad actors are attempting to artificially raise prices on basic need products during a global health crisis and, in line with our long-standing policy, have recently blocked or removed tens of thousands of offers.”
On Tuesday, Reuters reported that authorities in Italy, which has seen what is so far the biggest outbreak of the disease in Europe, were opening an investigation into “insane” online prices for medical supplies, though without naming any sites. While the Centers for Disease Control and Prevention warned Americans Tuesday that an outbreak was likely to spread to the US, the agency does not currently recommend the general public use face masks—experts say proper handwashing is often more important to prevent the spread of disease.
The top best seller in Amazon’s “Medical Face Masks” category, a package of 100 generic blue disposable masks, is going for $15, almost four times what it cost only a few weeks ago, according to data from Keepa, a company that tracks prices on Amazon. More expensive are so-called N95 respirators, which unlike looser-fitting masks keep out small airborne particles and are most often used to protect against airborne transmission. The price of a box of 20 particulate respirators made by 3M and sold by independent merchants has almost quadrupled from $17 to $70 since the end of January. A package of 20 respirators made by Honeywell, another major supplier, and also sold by third parties has quintupled from $12.40 to $64. Representatives from both 3M and Honeywell said they haven’t raised list prices for their products but can’t control how much third parties charge.
Amazon requires sellers abide by its Fair Pricing Policy, which prohibits listing items for significantly more than “recent prices offered on or off Amazon.” The company told at least several mask sellers earlier this month they had violated the rule, according to Ed Rosenberg, a consultant who also runs a support group for Amazon sellers. “If you price gouge—charge too much for these masks, they sometimes take you down,” he says.
James Thomson, a former Amazon employee and partner at Buy Box Experts, a firm that consults with Amazon merchants, says the company often enforces its Fair Pricing Policy during the holiday season, especially with sellers offering popular toys. “If sellers change their prices too much, or worse yet, change the list price on their items so that they can move up their selling price, Amazon notices and may intervene,” he says.
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Shoppers have complained about skyrocketing prices for supplies on Amazon during other public emergencies. As Hurricane Irma approached Florida in 2017, for example, surging prices for bottled water caused an outcry online. Amazon told USA Today at the time, “We are actively monitoring our website and removing offers on bottled water that substantially exceed the recent average sales price. Prices have not widely fluctuated in the last month. Lower priced offers are quickly selling out, leaving higher priced offers from third party sellers.”
In the US, most states have laws prohibiting people from raising the price of basic necessities during a state of emergency. Some economists argue that these laws can have unintended consequences, for example incentivizing people to hoard supplies by keeping prices artificially low. The federal government declared that Covid-19 presented a public health emergency on January 31, following a similar decision by the World Health Organization internationally. More than 77,000 people are confirmed to have been infected with the disease in China, and over 2,600 have died.
“This is a hard one for Amazon, because they do not want its customers to be taken advantage of,” says Rosenberg. “But there is also supply and demand, and sellers should be able to charge more if they pay more and demand is high.”
The way Amazon exerts control over independent merchants has become a sensitive issue for the retail giant over the past year as it’s faced a series of mounting antitrust investigations around the world. As part of its probe, the US Federal Trade Commission has reportedly interviewed a group of Amazon sellers to determine whether the company uses its power to hurt competition.
Suppliers have struggled to keep up with demand for face masks, in part because China, the epicenter of the coronavirus outbreak, is where many of them are manufactured. Only 5 percent of the surgical face masks purchased in the US every year are made there, according to one estimate—the rest mostly come from China and Mexico. Of course, that’s also the case for many items sold on Amazon. The market for face masks is just one indicator of how Covid-19 is disrupting supply chains around the world. Earlier this month, Amazon warned all sellers they may need to cancel orders or temporarily put their account on “vacation status” due to the coronavirus outbreak.
Amazon has also struggled to police its market for face masks in other ways. In addition to battling price increases, the company removed listings for products that made false claims about the virus and the Covid-19 disease it causes, according to CNBC. Some reviews for face masks accuse merchants of selling counterfeits or masks in boxes that were previously opened. Earlier this month, the Better Business Bureau released an alert about the outbreak, warning consumers that some sites may “take your money and send you low-quality or counterfeit masks.” As Covid-19 continues to spread, these issues are likely only to become more acute on Amazon and across the web.
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Post time: Mar-10-2020