Retailers warned not to hike prices in response to coronavirus demand
The competition regulator is urging businesses to behave responsibly and not hike prices in the wake of the coronavirus outbreak.
The competition watchdog has warned retailers and brands not to “exploit” people’s concerns about the coronavirus by increasing the price of products such as hand sanitisers, face masks or wipes.
The Competition and Markets Authority (CMA) is monitoring sales and pricing practices, and says it will take action against any company found to be breaking the law. The warning comes after reports of big price increases for some items. Companies that make “misleading” claims about the efficacy of products will also be targeted.
CMA chairman Lord Tyrie says: “We will do whatever we can to act against rip-offs and misleading claims, using any or all of our tools; and where we can’t act, we’ll advise government on further steps they could take, if necessary.”
Those further steps could include asking the government to introduce price controls on certain products.
CMA chief executive Andrea Coscelli adds: “We urge retailers to behave responsibly throughout the coronavirus outbreak and not to make misleading claims or charge vastly inflated prices. We also remind members of the public that these obligations may apply to them too if they resell goods, for example on online marketplaces.”
The move from the CMA comes after the advertising regulator, the Advertising Standards Authority (ASA), banned a series of “scaremongering” ads for face masks it accused of taking advantage of people’s fears over the outbreak.
In the ruling, the ASA found that online ads from two companies were irresponsible, misleading and “likely to cause fear without reasonable justification” – and therefore in breach of its code. The ads included phrasing that claimed the virus is spreading “at the speed of light” and that there is a “growing sense of panic”, while claiming their products provide “unparalleled protection” and “peace of mind”.
Neither of the companies behind the ads responded to attempts by the ASA to contact them.
Facebook has also been forced to ban ads for products that claim to cure or prevent Covid-19, the disease caused by the coronavirus. That means, for example, that ads which claims face masks are 100% guaranteed to prevent the spread of the virus will not be allowed.