A box of face masks priced at $4.21 in early 2020 skyrocketed to $79.99 on Amazon as COVID-19 lockdowns gripped the nation. Arm & Hammer baking soda followed suit, leaping from $4.65 to $79—a 1,523 percent hike detailed in federal court records. These spikes signaled the start of a broader legal confrontation over alleged pandemic profiteering.
Court Rejects Amazon’s Defense
On January 5, 2026, U.S. District Judge Robert Lasnik in Seattle denied Amazon’s motion to dismiss a class-action lawsuit claiming price gouging during the crisis. He deemed the company’s arguments unpersuasive, paving the way for consumers to pursue claims of exploitation amid shortages and restrictions.
The decision thrusts Amazon into discovery, where its pricing algorithms could face scrutiny. Lasnik ruled that plaintiffs showed Amazon exploited shoppers with few alternatives for essentials like food and protective gear.
Crisis Exploitation Alleged
Shoppers turned to Amazon as a primary source during lockdowns, facing health mandates and supply disruptions that limited options. The judge found these conditions created a plausible case of unfair pricing, elevating Amazon’s dominant role into a trigger for stricter consumer safeguards.
The suit covers purchases from January 31, 2020, to October 20, 2022—aligning with emergency declarations—and spans categories like cleaning supplies, medications, and household items.
Essential Goods Targeted
Price surges extended beyond masks and baking soda. Quilted Northern toilet paper rose 1,044 percent from $17.48 to $200. Aleve pain relievers climbed 233 percent amid shortages.
These patterns across food, personal protective equipment, and necessities bolster claims of intentional profiteering, not mere market fluctuations.
Dual Pricing Strategy Alleged
Plaintiffs charge Amazon with two tactics: overlooking exorbitant third-party prices and raising its own inventory costs. This approach, they argue, profited from desperate buyers through both marketplace facilitation and direct sales.
Internal documents reportedly show Amazon viewed gouging as harmful and built systems to curb it, even assuring state attorneys general of protections. Yet the company allegedly applied bans to sellers while sparing its own practices.
Judge Lasnik highlighted this inconsistency: if Amazon could spot violations among vendors, it should have curbed them internally too.
Discovery Phase Begins
The ruling advances the case to evidence gathering, potentially revealing communications and algorithm details behind the Buy Box feature that favors listings. Amazon confronts a bind—resist and risk court friction, or disclose and expose trade secrets to rivals and regulators.
Plaintiffs seek refunds, triple damages under Washington law, and orders against future overpricing, with potential liability in the billions given the class scale and timeframe.
Market Dominance Under Scrutiny
The decision pierces Amazon’s claim of mere platform neutrality, holding that algorithmic controls during emergencies invite liability. It signals courts’ readiness to probe power dynamics in digital marketplaces.
Broader effects loom for rivals like eBay and Walmart’s platforms, as well as ongoing probes by the Federal Trade Commission and state officials into Amazon’s operations.
As discovery unfolds amid regulatory heat, settlement talks may gain urgency to avert trial exposure. The outcome could redefine how consumer laws apply to AI-driven pricing in crises, shaping e-commerce governance for years ahead.
Sources:
“Amazon must face price gouging lawsuit, US judge rules.” Reuters, 2026.
“Amazon Must Face U.S. Price-Gouging Lawsuit, Judge Rules.” Yahoo Finance, 2026.
“Hagens Berman: Court Denies Amazon’s Motion to Dismiss Consumers’ Lawsuit.” Business Wire, 2026.
“US judge allows Amazon Covid-era price gouging lawsuit to proceed.” Retail Insight Network, 2026.
“Amazon must face price gouging lawsuit, federal judge rules.” Missouri Lawyers Media, 2026.