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Guild Sticks Up for Amazon Sellers in Federal Court

Guild Sticks Up for Amazon Sellers in Federal Court

A group representing online sellers appeared in Federal Court on Thursday in an effort to get a temporary restraining order and preliminary injunction against the Attorney General of Kentucky over his actions against Amazon sellers around alleged price gouging.

As we reported on May 2nd, the Online Merchants Guild (OMG) sued the Commonwealth of Kentucky claiming its price-control statutes were unconstitutional when applied to online merchants who offer items for sale in the national marketplace on platforms like Amazon.

Attorney Paul Rafelson, Executive Director of the Online Merchants Guild, told EcommerceBytes that rather than granting a temporary restraining order last week, Judge Van Tatenhove will hold a hearing on the permanent injunction as early as this week.

In its May 11th filing, the Online Merchants Guild (OMG) said it was sensitive to the need for the Kentucky Attorney General to enforce consumer protection laws. “Fortunately here, there is a solution that is both constitutional and effective: regulate Amazon, which does have the means to control product listings and sales in its store.”

The OMG filing also said the American public has a compelling interest in the continued availability of COVID-response goods and other consumer goods supplied by the private marketplace. “There is also an important public interest in the survival of small businesses like the Online Merchants Guild’s members.”

In bringing us up-to-date about the hearing, Rafelson had some harsh words for Amazon, which he said was in the position to prevent pricing from getting out of control.

“Amazon is spinning price gouging to give media the impression that they are victims, yet they have earned 15% to 45% on each of these sales,” he said.

“Amazon misled merchants with features like the “match low price” offer, and failed to turn off features in its API that would have prevented prices from going out of control.”

Rafelson said states were reluctant to pursue Amazon because of Amazon’s jobs and incentives. “Meanwhile, Amazon is proposing a federal solution for price gouging is conveniently one of zero accountability for the MAJOR role they play, and the steps they didn’t take to prevent prices from going high, because they were profiting from these sales,” he alleged.

The coronavirus pandemic is impacting sellers in numerous ways, including the court hearings themselves, which are being held telephonically.

Rafelson said the Attorney General’s briefs are due on Tuesday, the OMG’s reply brief is due on Wednesday, “so we could be back in court as soon possibly Thursday,” he said.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.