A maskmaker company 3M Co. MMM has sued a third-party seller on Amazon.com Inc.'s AMZN e-commerce platform for engaging in price gouging of its products.
What Happened
A California individual, Mao Yu, and his affiliate companies, sold 3M's N95 masks for $23.21 apiece, 3M said in the lawsuit, the Wall Street Journal reported Monday.
The company said the third-party seller inflated the price by more than 18 times, as a unit of its N95 masks usually sells for around $1.25, according to the Journal.
Yu sold masks worth more than $350,000 on Amazon, the Journal reported.
Why It Matters
Amazon has faced criticism over delayed action against third-party sellers attempting to profit from the novel coronavirus (COVID-19) pandemic.
Prices of essential items like hand sanitizer gels and facial masks were inflated as early as February in the United States as the coronavirus cases started getting reported outside of China.
Amazon has said it has taken action against more than 6,000 sellers and called on the United States Congress to create a federal level law against price gouging during national emergencies.
Price Action
3M shares closed 0.3% lower at $166.87 on Monday. The shares traded further 0.5% lower at $166.01 in the after-hours session.
Amazon shares closed 1.6% higher at $2,524.06 on Monday and inched further higher at $2,526 in after-hours.
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