The 3M corporation has filed suit against a third-party Amazon seller called KMJ Trading Inc, which allegedly sold more than $350,000 worth of N95 respirator masks, as first reported by The Wall Street Journal. The products were listed for as much as $23 per mask — a huge markup from the list price of $1.27.
Amazon has struggled with counterfeit mask sales since the beginning of the novel coronavirus outbreak, when N95 masks became an urgent necessity for essential workers. Amazon warned Marketplace sellers against price gouging as early as February, ultimately restricting sales of both face masks and hand sanitizer on March 11th. KMJ’s alleged price-gouging took place before those restrictions went into effect, beginning on February 24th.
KMJ itself used multiple accounts to make those sales, offering 45 different products across three different storefronts.
The lawsuit cites a number of customer complaints about the masks, which appear to have been both deceptively labeled and occasionally defective. “I think these are fake N95 Mask, and seller price gouged me 20 times the retail price,” one complaint reads. “Ten-pack of fake N95 mask for $150 is just crooked during this pandemic.”
3M hasn’t raised its price for N95 masks, and the US supply has been tightly controlled by the Federal Emergency Management Agency. That combination of high demand and restricted supply created the perfect conditions for price-gouging, and KMJ is far from the only company to take advantage of the situation. As part of its filing, 3M says it has filed eleven other lawsuits related to counterfeit products and price gouging during the pandemic.
Reached for comment, Amazon applauded the lawsuit and emphasized its anti-counterfeiting efforts on Marketplace. The company says it has removed more than 500,000 pandemic-related products from the marketplace since the outbreak began.
“We’re proud to be working with 3M to hold these bad actors accountable,” said Dharmesh Mehta, Amazon’s VP in charge of customer trust and partner support. “When we find a bad actor violating our policies, we work quickly to remove the products and take action on the bad actor, as we’ve done here, and we welcome collaboration from brands like 3M.”
3M has asked for statutory damages as high as $2 million dollars and a permanent injunction against the defendants from selling goods identified with 3M.
“By selling and delivering to customers counterfeit, damaged, deficient, or otherwise altered respirators and engaging in price-gouging, Defendants caused irreparable damage to 3M’s reputation,” the complaint reads. “There is no adequate remedy at law for these injuries.”
2:59PM ET: Updated with official comment from Amazon.