New York Attorney General Letitia James today led a coalition of 15 attorneys general urging Congressional leaders to support a ban on price gouging at the national level. While over 40 states ban price gouging, there is no federal law preventing businesses from raising prices to increase their profits on essential goods during an emergency. In a letter to Congressional leaders, Attorney General James and the coalition argued that a national ban on price gouging would give the federal government the power to crack down on price gouging that cannot be stopped by a single state, and allow states and the federal government to work together to stop illegal price gouging in national supply chains.
“Businesses should never be able to hike prices during an emergency just to increase their profits,” said Attorney General James. “When companies take advantage of major disruptions and raise prices of food and supplies that New Yorkers rely on, my office holds them accountable, getting people their money back and protecting their wallets. Our federal government should have the same power to protect Americans when disaster strikes and stop price gouging at the national level that threatens both hardworking families and small businesses.”
Bans on price gouging let businesses raise prices to cover costs but prevent them from raising prices further solely to increase their profits during an emergency. Attorney General James and the coalition argue in their letter that prohibiting price gouging benefits both consumers and businesses. First, it encourages much-needed production at critical times by only allowing businesses to make more money by selling more products, instead of by raising prices. Second, it prevents businesses from risking long-term harm and reputational damage by overreacting in an emergency and setting prices too high. Third, it discourages hoarding in an emergency, since rising prices can prompt customers to over-buy. Fourth, price gouging bans protect consumers from monopolists who can raise prices without worrying about consumers’ reactions or being undercut by a competitor.
The COVID-19 pandemic and the onset of war in Ukraine disrupted supply chains at the national level, creating opportunities for price gouging that were sometimes out of reach from individual states. Attorney General James and the coalition argue in their letter that a federal ban would complement states’ anti-price gouging measures to help stop price gouging at the national level.
As Attorney General James and the coalition note, attorneys general have successfully stopped price gouging at the state level, demonstrating a clear need for national enforcement to complement these efforts. In New York, Attorney General James has secured decisive settlements with companies for illegally raising prices during emergencies, including the COVID-19 pandemic. In March and April 2024, Attorney General James distributed over 9,500 cans of baby formula in Buffalo and New York City as part of a settlement with Walgreens for illegally raising prices of baby formula during the 2022 shortage. In May 2023, Attorney General James recovered $100,000 from Quality King for price gouging Lysol products at the beginning of the COVID-19 pandemic. In April 2021, Attorney General James secured 1.2 million eggs for New Yorkers from Hillandale Farms Corporation as part of a settlement resolving a lawsuit brought by the Office of the Attorney General (OAG) in August 2020 for illegally gouging egg prices in the early months of the pandemic.
In March 2023, Attorney General James proposed new rules to protect consumers and small businesses by making it easier for OAG to investigate and combat price gouging. Throughout the pandemic, during major disruptions, and ahead of recent declared disasters, Attorney General James has issued consumer warnings against price gouging on essential supplies.
Joining Attorney General James in sending the letter to Congress are the attorneys general of California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, New Jersey, New Mexico, Oregon, Pennsylvania, Vermont, and the District of Columbia.
No comments:
Post a Comment