San Luis Obispo County District Attorney Dan Dow announced that he reached a settlement with Walmart Corporation, resolving charges that Walmart engaged in price gouging on its website during the pandemic.
In April 2020, California Governor Gavin Newsom issued an Executive Order that prohibited the sale of medical or emergency supplies for an "unconscionably excessive price." For items which the retailer had not sold prior to February 4, 2020, the order defined "unconscionably excessive price" as a price that is more than 50 percent greater than the amount the business paid for the supplies. Here, the DA alleged that, in May and June 2020, Walmart sold Caresour disinfecting wipes for prices ranging from $18.99 to $19.99, which the DA said exceeded the 50% markup limit.
The DA said that after he contacted Walmart, the company removed the wipes from its online platform and provided a 100% refund to all consumers who bought the wipes at the inflated prices throughout the State of California. As part of the settlement, Walmart also agreed to pay the DA's office $9,000, which includes a civil penalty and investigation and litigation costs.
In a statement, DA Dan Dow said, "Protecting consumers in San Luis Obispo County increases the public’s trust in local business and fosters a level playing field for businesses in our community and beyond."
The DA's action here follows a number of cases around the country against retailers who were alleged to have engaged in price gouging during the pandemic. Some examples include the Texas Attorney General's action against Cal-Maine Foods (related to the sale of eggs), the New York Attorney General's action against Hillandale Farms (also related to the sale of eggs), and the New York City Department of Consumer and Work Protection's actions against supermarkets and other retailers (related to the sale of face masks, wipes, and other PPE).
One of the interesting things to note about this enforcement action is that, even though it was brought by a local enforcement agency, alleging violations of state law, the basis for the action was the company's online sales. It's an important reminder that, even if you're advertising or selling products online, to a national audience, you still may be responsible for complying with individual state and local laws that apply.
"Protecting consumers in San Luis Obispo County increases the public’s trust in local business and fosters a level playing field for businesses in our community and beyond" -- San Luis Obispo County District Attorney Dan Dow