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Law360 (May 4, 2020, 10:42 PM EDT) -- An eBay Inc. shopper hit the online retail platform with a putative price-gouging class action in California federal court Monday, accusing it of encouraging sellers to jack up the prices of masks, hand sanitizers, and other products that are in high demand during the coronavirus pandemic.
Jeanette Mercado, an Uber and Lyft driver, says that she was forced to pay a 300% markup for the N95 masks she bought on eBay to protect herself from the virus. While eBay is now publicly claiming that it's trying to stop sellers from gouging buyers, its business model "not only allows but encourages" the behavior, she said in her suit.
"In addition to charging fees for initially listing items, eBay charges a 'final value fee' when items actually sell, which is calculated as a percentage of the total amount of the sale," she said. "Thus, the higher the sale price, the more profit eBay stands to earn."
Mercado is seeking to represent Californian and national classes of thousands of eBay buyers who have paid at least 10% more for a slew of necessities after Feb. 3 than they did either on Feb. 2 or prior to any declaration of a COVID-19 state of emergency.
While the complaint gives examples of marked up goods like masks, disinfectants, baby products and toilet paper, the "protected products" covered in the proposed class definition includes "all consumer food items or goods, goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight, and storage services, or gasoline or other motor fuels."
The suit accuses eBay of violating California's Unfair Competition Law and its Consumers Legal Remedies Act. It seeks unspecified damages.
In an attempt to avoid negative publicity while "allowing price-gouging to flourish," eBay took "superficial and ineffective" steps on March 5 to combat the stop the phenomenon, the complaint alleges. It banned the sale of numerous items related to COVID-19 by anyone other than those selling in a fixed-price format, eBay announced, according to the complaint.
"EBay knows that its 'ban' is insufficient and ineffective to halt the rampant price gouging that pervades its platform: while it has sought to remove 'millions' of listings violating the 'ban,' any such action failed to effectively stop the ongoing price gouging where on any given day it hosts over 1.3 billion listings," Mercado said.
The suit includes numerous examples of apparent gouging, including respirator masks being sold for $100 apiece, a $49.90 pack of toilet paper, and a can of Lysol being sold for $45.49.
Representatives for the parties did not immediately respond to requests for comment Monday.
Mercado is represented by Alan Kang of AK Law ACPC.
Counsel for eBay was not immediately known Monday.
The case is Mercado v. EBAY, Inc., case number 5:20-cv-03053, in the U.S. District Court for the Northern District of California.
--Editing by Emily Kokoll.
For a reprint of this article, please contact reprints@law360.com.
