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Amazon Surges to Record High, Vows To Crack Down on Coronavirus Price Gouging

Amazon said it will boost employee wages and crack down on price gouging as shares in the world's biggest retailer rise to fresh record highs.

Amazon Inc.  (AMZN) - Get Amazon.com, Inc. Report said Thursday that it has removed more than half a million items for sale on its main website, and turned over details of the sellers to scores of U.S. state attorneys general, amid allegations of price gouging during the coronavirus pandemic.

Amazon said 6,000 accounts had been suspended in the price gouging purge, which followed allegations that some sellers were marking-up key items by as much as 2,000 percent from previous listings. The suspension followed a letter from Congressional lawmakers to Federal Trade Commission Chairman Joseph Simons urging the regulator to investigate allegations of price gouging during the pandemic. 

"Amazon is acting aggressively to protect our customers from bad actors looking to exploit the crisis," the company said in Securities and Exchange Commission filing Thursday. "We’ve removed over half a million offers from our stores due to COVID-based price gouging, and we’ve suspended more than 6,000 selling accounts globally for violating our fair-pricing policies." 

"Amazon turned over information about sellers we suspect engaged in price gouging of products related to COVID-19 to 42 state attorneys general offices," the statement added. "To accelerate our response to price-gouging incidents, we created a special communication channel for state attorneys general to quickly and easily escalate consumer complaints to us."

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Amazon shares were marked 6% higher in pre-market trading Thursday to indicate an opening bell price of $2,4449.05 each, an all-time high and a move that would extend the stock's year-to-date gain to around 26%. The stock's 2020 run has also lifted the personal fortune of founder Jeff Bezos past $138 billion, according to Bloomberg's Billionaires Index, and the value of the company tops $1.22 trillion.

Amazon also said it would increase minimum wages for its employees in Europe and the United Kingdom, and pay increased overtime rates for U.S. workers by at least $34 per hour, for an overall cost of $500 million each month. 

The company has come under criticism, however, for its role in firing warehouse workers who have complained about conditions within the world's largest retailer, and using its market dominance -- customers are now spending a staggering $11,000 on the website every second -- to profit from the global crisis. Share prices gains have also lifted the value of Bezo's holding by around $24 billion this year, according to Bloomberg data. 

"Although these are incredibly difficult times, they are an important reminder that what we do as a company can make a big difference in people’s lives," Amazon said Thursday. "Customers count on us to be there, and we are fortunate to be able to help. With our scale and ability to innovate quickly, Amazon can make a positive impact and be an organizing force for progress."