Price gouging at Amazon and the case for public ownership
By
Eric London
8 September 2017
As Florida’s residents brace themselves for Hurricane Irma, Amazon is profiting from third party sellers hiking the cost of water sold on the corporation’s online marketplace.
Family and residents of areas expected to be slammed by the hurricane’s torrential rain and 180 mile per hour winds took to Twitter in recent days to protest high mark-ups on cases of water. Many people have attempted to buy water online in the run-up to the storm because grocery stores and warehouses quickly sold out.
Florida resident Lee Munro tweeted, “So. Florida girl trying to by food on @Amazon before Irma…prices have tripled. Isn’t that PRICE GOUGING? @JeffBezos”
Another user, J, posted a photo of a 24-pack of bottled water priced at $20, adding, “@Amazon, I’m in Tampa trying to buy water online because stores are out of water and this is crazy price gouging!”
Diana Moskovitz, an editor for the web site Deadspin, posted a photo of Amazon sellers charging $18.48 for a 24-pack of bottled water usually priced at $5-6. To ship the bottled water before the storm hits would cost $179.25, making the total cost $197.73, or $8.24 per bottle. USA Today reported that an Amazon search for Ice Mountain Spring Water priced a 24-pack at $99.99 before shipping.
Amazon replied by denying claims of price gouging. “We do not engage in surge pricing,” a corporate spokesperson told Business Insider, adding that bottled water prices “have not widely fluctuated in the last month.” While true that the price increases are not due to surge pricing, Amazon contracts with third party sellers and receives a percentage of sales revenue and is profiting from third party price hikes. The company…