Economy

To Avoid Charges of Price Gouging, eBay Bans Sale of Coronavirus Supplies

Attempts to impose low prices on emergency supplies often do far more harm than good.

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Another year, another disaster, another economically misguided tug of war over the merits of "price gouging." The arrival of COVID-19, otherwise known as coronavirus, ushered in a predictable boost in prices for essential goods, as well as well-intentioned but ill-advised government attempts to cap what businesses can charge for those items. Such measures certainly leave an impact: eBay, for example, responded to that pressure yesterday, announcing that it would leave the market entirely and pull all coronavirus-related supplies from its virtual stores.

"As you may have noted, we are seeing literally small hand sanitizers like this going for as much as $17," said California Governor Gavin Newsom, a Democrat, calling the widespread price increases in the state "unconscionable" and "usurious." Violators in Newsom's jurisdiction face up to a $10,000 fine and a year in jail. Sen. Ed Markey (D–Mass.) specifically turned to Amazon: While the company and the suppliers it works with "have a right to expect a reasonable return on the products they sell," he wrote in a letter to CEO Jeff Bezos, "they do not have a right to impose unjustifiably high prices on consumers who are seeking to protect themselves against the coronavirus."

The immediate implications are alarming: How can a private business owner be subject to crippling fines (or even imprisonment) for setting his or her own prices? Yet that question misses the full point. It fails to address that prices responding to the market—as they tend to do—is a good thing, even in the face of a deadly pandemic.

Accusations of greed hurdled toward price-gouging business owners are understandable, particularly when people are suffering. But compare that with a world of government-imposed price caps. Those ceilings force businesses to sell in-demand goods at artificially low prices, which fail to signal that said goods are scarce. Absent that marker, supplies are then quickly exhausted, depriving many vulnerable people of the ability to get their hands on any.

Though most critics claim price-gougers are the ones depriving needy people of important goods, that's rarely true in practice. Consider this hypothetical: Businesses across the state of California (a nod to Newsom) opt to not raise prices on hand sanitizer, greatly increasing the likelihood that a small cohort of people concerned about coronavirus will buy a large share of the item in bulk. Since there is a limited supply of hand sanitizer in the marketplace, the immobile elderly woman next door who hadn't yet made her assisted sojourn to CVS is basically out of luck. And, in this case, she is more at risk of succumbing to the disease, should she contract it.

Perhaps worst of all, regulatory restrictions on pricing can, in some cases, force third-party sellers to exit the market entirely, as seen with eBay. Though it sounds like a doomsday scenario, it's exactly what the retail giant chose to do yesterday when it began pulling all surgical face masks, hand sanitizers, and disinfectant wipes, opting not to go head-to-head with the 34 states that have strict price-gouging regulations. While the consequences vary across the U.S., the liabilities clearly outweighed the risk of selling vital goods. 

"We will continue to monitor the evolving situation and quickly remove any listing that mentions COVID-19, coronavirus, 2019nCoV (except books) in the title or description," the company wrote in a blog post. "These listings may violate applicable US laws or regulations, eBay policies, and exhibit unfair pricing behavior for our buyers."

This is quite literally why we can't have nice things.

NEXT: No, Stimulus Spending Wouldn't Be an Economic Vaccine Against the Coronavirus

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  1. Economic illiterates are just another example of why coercive mandatory government should not exist.

    1. But it does explain why too many people want coercive government.

  2. eBay, for example, responded to that pressure yesterday, announcing that it would leave the market entirely and pull all coronavirus-related supplies from its virtual stores.

    eBay doesn’t ever have anything (except branded merchandise like t-shirts and coffee mugs) for sale.

    Just sayin’.

    1. I searched ebay just this evening looking for clorox or lysol disinfectant wipes. sellers charging minimal $36 for ONE canister. other listings for $100 and $249.. what the heck???

      1. why is this even an issue like it is? how is that helpful to people out of work and below poverty level income? what is wrong with you the guilty ones doing this ? you need your head examined. greed is the first word that comes to mind, seriously you scum suckers.

  3. While the company and the suppliers it works with … “they do not have a right to impose unjustifiably high prices on consumers who are seeking to protect themselves against the coronavirus.”

    “Of course, the legitimate Health Industry does have this right.”

    1. There’s a willing buyer and a willing seller. That’s the only definition of “justifiable price” that is needed. Markey’s just wants to be in control.

      1. so okay you, yourself go to buy a customary and usual/typical product you’ve bought for a long time and all of a sudden it’s 5 times the cost you typically would have ever paid. now what do you think?

  4. You see, if you can’t buy it at all it’s way better than if someone better off than you gets it.

    Makes total sense, to a certain type of person.

    Once you assume that scarcity doesn’t exist, it all begins to become clear.

    1. Scarcity is a market failure that requires government intervention. The failure is that greedy capitalist pigs aren’t satisfied with their sky-high profit margins that let them all make hundreds of millions of dollars but will deliberately keep supplies low to justify jacking up their prices to extortionate levels. I mean, look at your average automobile, there’s at best maybe a few hundred dollars worth of metal and plastic and rubber and glass in an automobile and yet they charge like 30k for it. That’s like a 10,000% profit margin on each and every car those greedy bastards are making! And yet they still restrict supplies of cars so much so that they don’t even keep a few extra cars around they can give out for free to people who really need one, like me. I know, I’ve asked them. Bastards won’t even give me a free car it only costs them like 300 dollars to make. I sure will be glad when Bernie gets elected, he’ll get me a free car.

      1. Ahh the Yugo. What a fine piece of automotive craftmanship that car was.

      2. Please explain how government can prevent scarcity? By it’s actions of price gauging laws it is creating scarcity. I saw this first hand a few years ago after hurricane Harvey. A scare of fuel shortages caused every gas station to run out of fuel I n San Antonio. People were filling up 50 gal drums of fuel. If gas prices would arrive do you think those greedy bastards would have been doing that?
        And your premise of intentionally restricting supplies only works if there is one producer.. which we both know there is not.
        And you have zero idea what it costs to produce a car. It’s a lot more than $300. The cheaper the car the slimmer the profits.

        1. psssst…. I suspect sarcasm. But then, that’s just me.

          1. Are you sure? Jerry doesn’t seem very sarcastic to me.

        2. Woosh!

        3. Poe’s Law

      3. a few hundred dollars worth of metal and plastic and rubber and glass

        More like a few thousand, but whatever.

        And yet they still restrict supplies of cars so much

        You know what’s weird? Prices for cars are pretty high, but the supply of said cars is absolutely ridiculous. There are way too many cars being made and yet somehow prices stay up.

        1. Who needs 37 different models of car anyway?

          1. They legislated out 36 of those models; now you only get to pick a different color, wheel drive and engine size. Try to buy one that doesn’t nanny you with seat-belt lights and buzzers, don’t play with the radio while driving enforcement, blow-out balloons, and a whole slew of EPA garbage guaranteed to cause many problems while not showing any signs of being a solution to anything (The Eco-Scam is more of an emergency today than ever!!!)…

            But what they were allowed to do they have done amazingly. Comfort, noise reduction, fuel mileage (demand driven not legislatively), horsepower, durability (pushing upwards of 300K). Mostly thanks to the fairly unrestricted tech market.

      4. Sooo….. Jerryskids… Don’t you think it’s time for YOU!!!!! to be a “greedy capitalist pig”????? Ya know the “greed” talk in a free-market is completely laughable.

        Point the finger at all those “greedy” producers of your goods while lying around lazily in a permanent state of self-victimization. Go do US ALL a favor and go make $600 cars!!! Do you realize how fast you’d be a “greedy capitalist pig” if you’d just get up off your lazy *ss and build a car for twice as much as you’ve bought supplies for it!!!!!

      5. i agree with a great amount of what you’ve said .. and while the government body exudes greed in unbelievable manners and ways, it also is a direct impression to those business persons albeit at a lower income level to do the same .. it’s like one bad apple spoils the rest of human and mankind. okay I’ll show you, and in the process, i’ll get ahead mentality. it is not what we supposed united people should be exercising. you do get more bees with honey. I’m told and eventually learned in one impressionable way that when someone screws you , and people do, you overcome by forgiving them.. i mean really release and forgive their ignorant selfserving pig headed minds. let it go. glad I’m not you but i’m over you .. type forgiving.. wish you well you ignorant F. but yeah i’m letting go of all the horrible things you did and are doing to me personally.. for you it’s not personal it’s because you’ve clouded yourself into believing you are superior.. you go you jack off.. okay now YOU move on. totally release this jab and kick to injure you like it seemingly has. let it go. and thank God you arent that shallow individual. wait.. watch and see..
        their mean self serving life gets an adustment.
        you almost feel sorry for them.. but you already gave
        the anger away to the higher creator of your life.

        you pray for them.. not necessarily for ‘them’ but actualy
        for you.. it’s strange, hard to explain but it frees you
        by placing your angst at the foot of Jesus Christ. There aint nothing you can feel think or do that HE hasnt already been through. AMEN.

  5. These price-gouging businesses just don’t understand government economics.

  6. 1. Did Billy write a libertarian article here?
    2. Take a look at that picture. That’s your grocery a month after President Sanders is inaugurated.

    1. That’s a well-stocked Soviet supermarket – and you never had to worry about price-gouging at an empty store. You bet your ass Bernie’s getting a chubbie just thinking that someday soon this might be the US and it will all be thanks to him that this sort of equality exists.

    2. No.
      That’s your grocery store 12 hours after Sanders gets the Democrat Party nomination.

  7. Since alcohol-based sanitizers do not work against viruses (they protect you from bacteria), charging $17 a bottle would not actually be corona-based price-gouging.

    Seriously, folks – soap and water. Wash your hands for long enough to sing Happy Birthday twice. Leave the Purell for when you need to start of fire.

    1. How does hand sanitizer work?
      Generally speaking, alcohol-based hand sanitizers kill germs by disrupting the membranes of various microorganisms, including many viruses, explains James Scott, a professor at the Dalla Lana School of Public Health at the University of Toronto specializing in biological hazards in the workplace. Not all viruses have external membranes — for instance, alcohol-based hand sanitizers don’t kill norovirus, the virus best known for giving you diarrhea on cruise ships — but coronavirus does. “Luckily, that means it is susceptible to being killed by alcohol and alcohol-based hand rubs,” he says.

      https://www.rollingstone.com/culture/culture-news/hand-sanitizer-effective-coronavirus-covid-19-962027/

  8. Fascists gotta do fascism.
    Never vote for a democrat.

  9. will whiskey work inplace of hand sanitzer

    1. Yes, but it needs to be taken orally (or analy, I suppose).

    2. A good preventative measure if taken orally. Just make sure you have enough of it that you don’t feel you need to leave the house for a week.

      I saw Tito’s vodka came out telling people not to use their product as a disinfectant. I suspect that was a publicity stunt.

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  11. If you want a shortage to self correct, let sellers raise prices. Doesn’t take an economic genius to figure that out. If you want the shortage to persist, go to rationing and price controls.

    1. +1000000…. I often criticize in my head the very principle of stock purchases where one builds absolutely nothing but receives money through gambling on demand fluctuations.

      But this scenario is the exact scenario that prove my ill-advised head wrong. Buying up stock (hoarding) on a gamble that the market value would go up would be the very substance that would fill the gaps of high-demand shortages and thus work to even-out the supply chain in demanding periods such as this one.

  12. Death, War, Pestilence, Famine…pfaugh, let’s have some *important* news:

    “Virginia becomes first southern US state to ban hair discrimination

    “State passes measure after incidents of employees fired and children disciplined over hair texture and type sparked outcry”

    https://www.theguardian.com/us-news/2020/mar/06/virginia-hair-discrimination-ban

    1. ‘This is not only unacceptable and wrong, it is not what we stand for in Virginia,’ Ralph Northam said of hair discrimination.

      A person’s hair texture should have no bearing on what color they paint their skin.

      1. …and they shouldn’t have to cover up their hair with white pointy caps.

  13. Count on government to turn an epidemic into a disaster.
    Are we just too organized? Or gullible?
    Government. It’s us, y’know. Or at least kinda …

    1. I think the size/count included in the [WE] collective is the exact same quantity of gullible being asserted.

      If [WE] contains you and me; we can probably work out pretty good terms.

      If [WE] contains our neighborhood a short meeting could be good but not as good as just you and me because we’re speaking for more.

      If [WE] contains an entire State; it gets far, far less representation and isn’t very good at all.

      If [WE] contains the entire Nation – It’s a disaster from the start. [WE] should NEVER EVER concern the entire nation unless its problem is between the dealings of one Nation to another.

      The U.S. Constitution actually addressed this very well with it’s dual federalism plan of a very limited federal government.

  14. “Hand sanitizer” is otherwise known as “alcohol”, the same stuff we add to gasoline, drink, and clean our windows with. Just use Vodka or the kind of alcohol you can buy at the hardware store and put it in a little bottle.

    1. “Why, Officer, the very suggestion that I would *drink* that stuff! No, it’s to wash my hands with.”

      1. “The only time I’d drink it is if the handwashing fails and I get the virus anyway.”

    2. Vodka has about 40% alcohol

      Purell is 70%

  15. Coronavirus is death for the happiness of humans. It may be controlled within 1 year or more. It also comes to India.

    1. I hope not, then Shakira will write a 40k word story about it

  16. ‘Way back, after a hurricane, FL governor Jeb Bush issued an edict prohibiting any increase in generator prices.
    Generators stayed in warehouses all over the south, but no Floridians were ‘gouged’.

  17. they do not have a right to impose unjustifiably high prices on consumers

    Good thing it’s not unjustified. Skyrocketing demand is a perfect justification for increased prices.

  18. Boosted prices during emergencies is simply a tax on those who refused to prepare ahead of time.

    1. “…but its the [WE] foundation’s job to take care of me…”, the left will insist, “and by [WE] are in this together I mean YOU must be my slave and take care of me. The people who don’t want to be my slave are ‘greedy’ and ‘evil’. I’m special because I’m *human* and have *feelings* that you need to be enslaved by.”

      1. “… and need I even mention that depending on a persons color, sex or work-ethic some people are more *feeling* *human* than others”, they will persist until your ears bleed.

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  20. […] the immobile elderly woman next door who hadn’t yet made her assisted sojourn to CVS is basically out of luck […]

    And in the current situation, she’s still out of luck because hand sanitizer is running for ridiculous prices that put it out of reach for most people.

    Know who else is out-of-luck in both situations? Food service employees, who disproportionately live paycheck-to-paycheck and get no sick leave. They’ll be coming in to work sick, spreading disease. So basically everyone is “out of luck”.

    1. Say good-bye to the paycheck. Their add-value won’t be worth the risk; I’m eating at home because I’m not stupid and I don’t subsidize stupid.

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  22. Absolutely insane. This is up there with the gouging during hurricanes. No one should get to set prices. This should be challenged by the sellers of these goods and sue t he crap out of eBay. I am so tired of the nanny state people. Where is the Tea Party?

  23. Price gouging can’t exist in the context of an auction. That seems so obvious maybe I’m missing something, but I can’t imagine what (if I could I suppose I wouldn’t be missing it)…

  24. This virus is really deadly one

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