UK's Biggest Trade Union Takes Aim at Amazon Over 'Price Gouging' Allegations (theregister.com) 44
Unite -- the UK's largest trade union, with some 1.4 million members -- has accused Amazon of inflating prices for items such as hand sanitiser and other health products during the pandemic. From a report: Working with competition lawyers Preiskel & Co LLP, Unite has submitted a formal complaint to the Competition and Markets Authority (CMA) over alleged "abuse of its market position in relation to price gouging at the height of the COVID-19 pandemic." Unite claims that the price hikes hit vulnerable and older people, who had no choice but to stay at home and minimise their risk of infection. It has called on Amazon to "repay the overcharges." It claims to have uncovered 50 different items -- including soap, antibacterial spray, face masks, and toilet paper -- that were sold on Amazon "for at least double their usual price at the height of the pandemic last year."
Well, yeah (Score:2)
Amazon are a back of bastards; what did you expect them to do?
Re: (Score:3, Insightful)
Early in the pandemic, many of the listed items were in short supply. By charging higher prices, Amazon disincentivized hoarding.
TFA says the choice was higher prices vs lower prices. The real choice was higher prices vs empty shelves.
Comment removed (Score:4, Insightful)
Re: (Score:2)
Re:Well, yeah (Score:4, Insightful)
Early in the pandemic, many of the listed items were in short supply. By charging higher prices, Amazon disincentivized hoarding.
TFA says the choice was higher prices vs lower prices. The real choice was higher prices vs empty shelves.
Amazon disincentivized hoarding by the poor.
Re: (Score:2)
Amazon disincentivized hoarding by the poor.
We should help the poor with comprehensive programs of income support, job training, and tax credits, not by helping them to hoard hand sanitizer.
Re:Well, yeah (Score:4, Interesting)
By charging higher prices, Amazon disincentivized hoarding.
No they didn't.
The real choice was higher prices vs empty shelves.
No, this is not the real choice. There's also the choice of rationing, which is what governments actually implement when there is a life threatening supply crunch.
In fact many supermarkets and other shops opted to implement lightweight rationing so that everyone could in fact get the essentials they needed, especially the more vulnerable.
You cannot free-market-logic that away. I saw it in action and working.
Re: (Score:3)
In fact many supermarkets and other shops opted to implement lightweight rationing so that everyone could in fact get the essentials they needed, especially the more vulnerable.
You cannot free-market-logic that away. I saw it in action and working.
I saw it in action, too, and failing as often as it worked. It worked on hand sanitizer, somewhat. It failed utterly on toilet paper. I think the difference is that no one felt the need to hoard hand sanitizer, while people were more than willing to game whatever system the supermarket set up to get as much TP as they thought they might need, and then some.
Re: (Score:2)
It failed utterly on toilet paper.
Not round here it didn't. In fact the rationing was the only way my inlaws were able to get any at all. It was by no means perfect, but it was a lot better than nothing.
Re: (Score:2)
It failed utterly on toilet paper.
Not round here it didn't. In fact the rationing was the only way my inlaws were able to get any at all. It was by no means perfect, but it was a lot better than nothing.
Price increases to stop hoarding/mass buying would have worked better. Efficient allocation of scarce goods is what the free market does best.
Re: (Score:2)
Price increases to stop hoarding/mass buying would have worked better.
No it wouldn't.
Efficient allocation of scarce goods is what the free market does best.
Fortunately the supermarkets were not actually run by psychopaths who don't give a shit if people live or die due to being unable to get access to basic necessities in a time of crisis.
People are optimizing other things than what is in page 1 of your econ 101 textbook.
It is rather often even simpler (Score:2)
Many sellers list items at absurd prices, all the time. Furthermore, is it even surprising that not everyone tries to compete with the cheapest possible price? Once all the sellers competing on price are gone, you get offered the rest: People listing a tube of glue for eighty dollars. Because they typed something in wrong. Because they are going on vacation and don't want to actually deal with selling something, but also don't want to bother delisting it. Because they are scammers hoping for an accidental s
Re: (Score:2)
By charging higher prices, Amazon disincentivized hoarding.
When the next horrific wave starts filling hospital emergency rooms, we'll just start charging double and triple rates. Try and keep those "bothersome" patients from dying on property.
Same goes for gasoline during the next hurricane. Just charge $20/gallon after the storm blows through. That'll teach 'em. Damn hoarders.
Re: (Score:2)
Just charge $20/gallon after the storm blows through. That'll teach 'em. Damn hoarders.
If gas prices are allowed to rise to what the market will bear, fuel companies will preposition supplies to take advantage of the opportunity to profit, and there will be no shortage.
Price controls "solve" the "problem" that is created by price controls.
Re: (Score:2)
Just charge $20/gallon after the storm blows through. That'll teach 'em. Damn hoarders.
If gas prices are allowed to rise to what the market will bear, fuel companies will preposition supplies to take advantage of the opportunity to profit, and there will be no shortage.
Price controls "solve" the "problem" that is created by price controls.
Gas is one of those necessary commodities. I'm not going to say people are "addicted" to it, but they might as well be, so it's very hard to determine what the "market will bear", especially when you look at the fluctuating gas prices of the last 5 years just in the US.
And again, how is raising prices 500% or more the proper answer to stave off any chance of a shortage of a necessary commodity during an emergency? If we took that approach to COVID, we might as well charge $10,000 per shot to make global d
Re: (Score:2)
For one thing, Amazon is not about to roll over for a bunch of union goons.
Price gouging is a good thing (Score:3)
Re: (Score:3)
Just like this guy did [nytimes.com], and was subsequently prevented from selling his 17,000 bottles of hand sanitizer by Amazon.
Or the guy in Australia [newsweek.com] who stocked up on toilet paper in the hope of selling it, and was told to piss off when he went to return it.
Then there's the guy in New York [justice.gov] who was selling PPE for up to 500 times its value, while also lying to
Re: (Score:2)
Re: (Score:2)
Ah, I see. A True Believer in the power of the Free Market.
As long as people are assholes, the Free Market is about as real as frictionless pullies, massless strings, true communism, and "enlightened self-interest".
Re: (Score:2)
Ah, I see. A True Believer in the power of the Free Market.
As long as people are assholes, the Free Market is about as real as frictionless pullies, massless strings, true communism, and "enlightened self-interest".
I see you didn't propose any alternative. Wise choice, since there's no alternative that isn't worse.
Re: (Score:2)
So it's better to let those 17,000 bottles of hand sanitizer go unsold?
I would sell one bottle per customer at the normal price, and each additional bottle at the inflated price. Or is that still price gouging even though everybody can afford the product?
Re: (Score:2)
So it's better to let those 17,000 bottles of hand sanitizer go unsold?
I would sell one bottle per customer at the normal price, and each additional bottle at the inflated price. Or is that still price gouging even though everybody can afford the product?
That only works if there isn't an actual shortage. If there's really a shortage, then someone is going to have to go without. The question is how to optimize for maximum social utility, and how to best motivate potential suppliers to step up production to ease the shortage, and your solution does neither of those things, it just empties your shelves slightly slower than if you held the price constant, but not much slower.
If you actually want to keep supplies on the shelves for those who really need them
Re: (Score:2)
Actually, rationing causes shortages [investopedia.com]. You demand two of something but you can't legally buy more than one at any price because you're only rationed one--that's a shortage. Yes, even though there are still more of them left on the shelf when you leave the store.
Re: (Score:2)
even though there are still more of them left on the shelf
Oddly not necessarily.
A lot of people heard there was a shortage of toilet paper and other goods, so went out to buy them. They didn't _need_ those items at that time but rationing meant they bought them 'in case' so that if they did need them they'd have them available, and not be hostage to future rationed supply.
Re: (Score:2)
This is oversimplifying to the point of being untrue. Price gouging doesn't exist in a market with sufficient supply to cover everyone's demand so by definition some people who want to buy are prevented from getting the product. Increasing pricing will affect demand in two ways 1) it will lead to people who genuinely need the product but are too poor being unable to afford the p
Re: (Score:2)
One thing Florida does pretty well is that anyone who raises their prices on necessities in response to an approaching tropical system can find themselves in a world of financial trouble.
Raising a small percentage isn't uncommon, and isn't an issue. Charging 4-5x the going rate (or worse) is illegal, and punishable by some pretty hefty fines.
Re: (Score:2)
Your example isn't price gouging, just a price increase, so it does not demonstrate that price gouging is good.
If either a supply shock or a demand shock is applied to a clearing market, the new clearing point has a higher P *but also a higher Q than what would be supplied is the P remained at the clearing P*. That's what distinguishes a mere price increase from price gouging.
If an item is in short supply *but there is additional higher cost supply can can be brought to the market* then it is efficient for
Amazon doesn't set the prices, morons (Score:2)
The sellers set prices, not amazon. Don't they know the basics of how selling on amazon works?
Double? Wow! (Score:2)
Who would have thought that at times of short supply for a well in demand item that prices could rise to double! Imagine how much these people's minds would get blown if they tried to buy a last minute airline ticket.
Welcome to supply and demand. You can try passing laws to get rid of this basic economic principle, but you may want to switch away from capitalism and democracy before you do.
Are they going to criticise the RMT? (Score:1)
Re: (Score:2)
and has underground drivers on £60K?
Is there something you object to about that?
Working underground doing repetitive, high concentration work is not an easy job. And it makes large demands about your time outside the job as well, not to mention a lot of weekend working and the not-so-odd case of PTSD for when someone jumps in front of your train as you're hammering into the station at full speed.
Re: (Score:2)
What, wages comparable to drivers for surface trains, who also have long bouts of close concentration, immediate reaction required to suicides at stations, wandering livestock on country lines, vandals and graffiti artists in city lines, as well as a lot of working unsociable hours, weekends, etc.
You're going to be petrified by the prospect of your Uber driver wanting a decent wage too.
Seller set the price not Amazon (Score:2)
Dear traders (Score:3)
That wasn't Amazon, that were traders like you, selling on Amazon and Amazon is not your mother.
Caveat emptor.
Is there more than one Amazon? (Score:2)
During the height of the pandemic I didn't see a lot of price hikes among products "sold by Amazon," not to be confused with Amazon resellers. We shifted some hardware purchases from Home Depot and True Value to Amazon until those companies got their acts together and curbside pickup working. We shifted from a pet store that never did get their act together (and ballooned prices) to Amazon for kitty litter. There was no more than normal price variability, and at one point we stocked up on kitty litter when