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Amazon removes hundreds of thousands of ‘high-priced offers’ amid coronavirus price gouging

Jeff Bezos, founder and CEO of Amazon, pictured on September 13, 2018.

Bloomberg | Getty Images

Amazon said it has removed hundreds of thousands of “high-priced offers” and suspended thousands of sellers who have engaged in price gouging on its marketplace. 

The company acknowledged the move on Friday in a letter it wrote to Sen. Ed Markey, D-Mass. Earlier this week, Markey wrote a letter to Amazon CEO Jeff Bezos seeking more information on what steps the company is taking to crack down on price gouging and how it determines whether an item is unfairly priced. 

Brian Huseman, Amazon’s vice president of public policy, said in the company’s response to Markey that Amazon is “proactively monitoring” the marketplace for unfair prices and “aggressively” enforcing its fair pricing policy “in order to protect our customers.” 

Amazon says it has removed 530,000 offers from the marketplace for coronavirus-based price gouging and suspended more than 2,500 seller accounts in its U.S. marketplace for violating its price-gouging policies. Huseman said Amazon is working with state attorneys general to prosecute bad actors. 

The letter comes after CNBC previously reported Amazon, Walmart and other e-commerce companies have struggled to curb third-party sellers who are overcharging for products that have spiked in demand amid the spread of the coronavirus.

Sellers inflated prices for hazmat suits, face masks and hand sanitizer, among other products. For example, before Amazon ran out of stock, N95 face masks were priced at $13.28, but CNBC found examples of face masks being sold for as much as $195.

Huseman also provided details around how Amazon detects price gouging, saying the company continuously compares prices submitted by sellers with current and historic prices within and outside of Amazon. 

The company uses machine learning models, in part, to detect price gouging, but has recently stepped up human monitoring as price gouging has spread in light of the coronavirus. Amazon is now deploying “an additional dedicated team” that’s working “24 hours, seven days a week” to spot price gouging on items like protective masks and hand sanitizers, Huseman said. 

“We have also instituted additional manual audits of products in our stores due to the increased risk of price gouging from unscrupulous sellers seeking to evade our automated systems and take advantage of customers,” Huseman wrote.

Last week, Amazon said it blocked or removed more than 1 million products that made suspect or misleading claims about the coronavirus. CNBC previously found examples of third-party sellers exploiting fears about the virus by incorrectly marketing face masks with specific keywords such as “coronavirus face mask” or “N95 face mask,” referring to a specific type of respirator that keeps out small airborne particles.

Representatives for Markey didn’t immediately respond to a request for comment.