Why price gouging is illegal

Contemporaneous documentation is key to not only defending a price increase, but also in communicating with customers. Do not talk with your competitors. Antitrust laws still apply. And certain companies like those selling health care products will be monitored more closely by the Department of Justice.

It may seem like good business sense to reach out to a competitor to see if they are experiencing similar issues with their supply chain or workforce, or whether they are contemplating raising prices.

Resist this temptation. Businesses should expect that states are going to be vigilant in pursuing any perceived price gouging. Given the current media attention on medical masks and hand sanitizers, companies thought to be engaged in price gouging will not escape scrutiny. Because the legal landscape for price gouging is varied, businesses must be careful, particularly if they operate nationwide. We follow industry news and trends so you can stay ahead of the game. Subscribe to receive emails regarding policies and findings that impact you and your business.

Already a subscriber and want to update your preferences? Click here. Mobile Search Search. Price Gouging Statutes There is no national price gouging regulation, although such regulation was considered in the wake of Hurricane Katrina. When Price Gouging Regulations Are Triggered The majority of state price gouging statutes are triggered by a declaration of emergency from a city or county executive, a governor or the President of the United States.

When a Price Increase Qualifies as a Price Gouge There is no uniform threshold used to determine whether a price increase has become a price gouge.

Price Gouging Enforcement in the Absence of a Statute Simply because a state does not have a price gouging statute does not mean that a price gouging enforcement will not occur. Price Gouging Exceptions Not all price increases, however, constitute price gouging. Price gouging refers to sellers trying to take unfair advantage of consumers during an emergency or disaster by greatly increasing prices for essential consumer goods and services.

Yes, in certain circumstances. The statute applies immediately after the President of the United States, the Governor of California, or city or county executive officer declares a state of emergency. Individuals, businesses, and other entities must comply with the statute. The statute applies to all sellers, including manufacturers, wholesalers, distributors, and retailers.

It also covers all sales, including sales to individuals and families, businesses and other organizations, and government agencies. The statute applies to the following major necessities: lodging including permanent or temporary rental housing, hotels, motels, and mobilehomes ; food and drink including food and drink for animals ; emergency supplies such as water, flashlights, radios, batteries, candles, blankets, soaps, diapers, temporary shelters, tape, toiletries, plywood, nails, and hammers; and medical supplies such as prescription and nonprescription medications, bandages, gauze, isopropyl alcohol, and antibacterial products.

It also applies to other goods and services including: home heating oil; building materials, including lumber, construction tools, and windows; transportation; freight; storage services; gasoline and other motor fuels; and repair and reconstruction services. The goods and services listed above are just examples; the statute's protections are not strictly limited to these items. The statute generally applies for 30 days after a declaration of emergency, although for reconstruction services and emergency cleanup services, it applies for days after a declaration of emergency.

Immigration consultants, attorneys, notaries public, and organizations accredited by the U. Board of Immigration Appeals. Charging the consumer a price that is grossly in excess of the price at which similar property or services are sold. B In determining whether an act or practice is unconscionable, the following circumstances shall be taken into consideration: 2 Whether the supplier knew at the time the consumer transaction was entered into that the price was substantially in excess of the price at which similar property or services were readily obtainable in similar consumer transactions by like consumers.

Utah Code Ann. Price Gouging is Illegal. During a State of Emergency in the City of New York, it is illegal for businesses to charge excessive prices for goods or services that are essential to health, safety or welfare.