Democrats ask FTC to tackle online baby formula price gouging

Reps. Bobby Scott (D-Va.) and Frank Pallone Jr. (D-N.J.) have asked the Federal Trade Commission (FTC) to address online price gouging of baby formula during the nationwide shortage. 

The Democrats sent a letter on Monday requesting that the agency issue a public advisory to encourage online marketplaces to put measures in place to detect and prevent exploitative practices by third-party vendors selling infant formula. 

The FTC launched an inquiry into the formula shortage in May. The advisory for online marketplaces such as eBay, Facebook and Amazon would help complement the ongoing work being done to address the supply issue, the Democrats said. 

“While the steps outlined in the FTC’s announcement last month are encouraging, we request that the FTC additionally emphasize that online marketplaces can and should make efforts to protect users from price gougers and scammers. There are common-sense measures that online marketplaces can take to prevent fraud and unfair business practices, and it should not be solely the burden of consumers to uncover such deception,” they wrote.

The letter cites reports with examples of vendors selling formulas on eBay for almost double the price of what it is sold in stores, and of vendors on Facebook selling products that don’t exist. In one reported case, a Facebook vendor disappeared without shipping any formula to a consumer who paid $300. 

“Vendors must not be allowed to take advantage of this national crisis by selling products at unreasonable prices or, even worse, committing outright scams by taking consumers’ money without providing products,” they wrote. 

The Democrat’s request appears aimed at calling on companies to put in place measures to monitor third-party sellers. The FTC’s initial inquiry already aims to target people who are seeking to exploit or scam American families attempting to buy infant formula.

FTC Chairwoman Lina Khan said in a statement last month that the inquiry will in part investigate people who use online “bots” to automatically purchase and resell formulas at “exorbitant prices.” 

The FTC also issued a notice warning consumers about scammers who are tricking parents into paying high prices for formula that never arrives.