According to CNBC, a U.S. District Judge, Robert Lasnik in Seattle, has ruled that Amazon must face a proposed class-action lawsuit accusing it of price gouging during the COVID-19 pandemic. The lawsuit claims Amazon failed to stop third-party sellers from charging “flagrantly unlawful” prices and inflated prices on its own inventory to profiteer. Specific examples cited include a 1,044% price hike on Quilted Northern toilet paper, a 1,523% increase on Arm & Hammer baking soda, and an 1,800% surge on some face masks. The case seeks damages for consumers who made purchases on Amazon between January 31, 2020, and October 20, 2022. Amazon’s argument that Washington state consumer laws were too vague was rejected by the judge as “unpersuasive.”
Amazon’s “No Choice” Argument Sticks
Here’s the thing about Judge Lasnik’s ruling: the core logic is devastatingly simple for Amazon to overcome. He found it plausible that during the pandemic, with product shortages and a massive shift to online shopping, consumers had “no meaningful choice” but to buy from Amazon even at unfair prices. That’s a huge deal. It frames Amazon not just as a retailer, but as an essential utility during a crisis. And if you’re deemed an essential utility, the rules around fair play get a lot stricter. The plaintiffs’ lawyer, Steve Berman, says internal Amazon docs show the company knew what price gouging was and told state attorneys general it was trying to stop it. If those documents show Amazon knew about the problem but didn’t act effectively—or worse, participated—this gets very ugly, very fast.
More Than Just Third-Party Sellers
Most people might assume this is all about sketchy third-party sellers on the marketplace. But the lawsuit explicitly accuses Amazon of inflating prices on its own product inventory. That’s a whole different ballgame. It moves the allegation from being a negligent platform to being an active, predatory retailer. A 233% hike on Aleve or a 1,000%+ hike on toilet paper, if done by Amazon directly, is much harder to explain away as an algorithm glitch or a rogue seller. It looks like a calculated decision. This dual accusation—failing to police the marketplace *and* gouging directly—makes the legal threat exponentially larger.
The Broader Implications for E-Commerce
So what does this mean for the future? If this case progresses and Amazon settles or loses, it sets a massive precedent. It effectively establishes that during a declared emergency, dominant online platforms have a heightened duty of care. They can’t just point to their marketplace terms of service and say “seller beware.” They might be forced into much more aggressive, real-time price policing. That’s a colossal operational and technological challenge. Think about the scale. We’re not talking about a local hardware store; we’re talking about a global digital bazaar with millions of SKUs. The compliance cost would be enormous. And it’s not just Amazon—this would ripple out to every major online marketplace. Basically, the era of pure platform neutrality, where the host isn’t responsible for seller pricing, could be over during times of crisis. That’s a fundamental shift in how we view these tech giants.
