DOJ issues new price-fixing warning as coronavirus outbreak fuels demand for masks, health products

The warning comes as demand for medical masks and more skyrocket in the U.S.

March 9, 2020, 1:57 PM

The U.S. Department of Justice came out swinging against "bad actors" who may attempt to take advantage of the novel coronavirus outbreak for personal gain by price fixing and more.

"The Department of Justice stands ready to make sure that bad actors do not take advantage of emergency response efforts, healthcare providers, or the American people during this crucial time," Attorney General William P. Barr said in a statement Monday.

"I am committed to ensuring that the department’s resources are available to combat any wrongdoing and protect the public," Barr added.

The DOJ said its newly-formed Procurement Collusion Strike Force is on "high alert" in a new warning issued Monday, and will not hesitate to bring criminal charges against companies and individuals who engage in price fixing or rigging bids for much-needed health equipment such as face masks and sterile gloves.

It is also especially monitoring for "collusive practices" in the sale of these health products to federal, state and local agencies.

Moreover, businesses that work together to divide the market or allocate among themselves consumers of public health products could also be prosecuted, according to the DOJ.

The announcement is part of a "broader administration effort to ensure that federal, state, and local health authorities, the private healthcare sector, and the public at large are in the strongest possible position to respond to the outbreak" of COVID-19, the DOJ said in a statement.

The government agency encouraged anyone with information on price fixing, bid-rigging, market allocation schemes or more connected to the coronavirus outbreak to report the activity on its website or via phone.

PHOTO:A sign advising out of stock sanitizer, facial masks and rubbing alcohol is seen at a store following warnings about coronavirus in Kirkland, Wash., March 5, 2020.
A sign advising out of stock sanitizer, facial masks and rubbing alcohol is seen at a store following warnings about coronavirus in Kirkland, Wash., March 5, 2020.
Jason Redmond/AFP/Getty Images

Last week, Amazon announced it removed more than 1 million products for misleading claims or price gouging amid the coronavirus outbreak.

"There is no place for price gouging on Amazon," a company spokesperson told ABC News. "We are disappointed that bad actors are attempting to artificially raise prices on basic-need products during a global health crisis, and, in line with our longstanding policy, have recently blocked or removed tens of thousands of offers."

Meanwhile, as fears of a pandemic sweep across the nation, Americans have been buying up face masks, hand sanitizer and more at skyrocketing rates.

Sales for medical face masks in the U.S. jumped 319% in the four-week period that ended on Feb. 22, according to data from the consumer research firm Nielsen. Household maintenance masks sales were similarly up 262% in that same period. Hand sanitizer sales spiked 73%, though Nielsen predicted that the demand for sanitizer hasn't even begun to peak.

The U.S. Centers for Disease Control and Prevention doesn't currently recommend that healthy people wear a mask to protect against coronavirus, and still urges hand-washing with soap and water over sanitizers.

Surgeon General Jerome M. Adams even implored the public to stop buying masks in a tweet last week, writing they are "NOT effective in preventing general public from catching #Coronavirus, but if healthcare providers can't get them to care for sick patients, it puts them and our communities at risk!"

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