While price gouging is often discussed in the context of existing products, new products and services may be covered as well. As a result, businesses looking to introduce new products during a price gouging emergency can seek guidance from the relevant price gouging laws before setting a price for their new good or service.
Pricing Controls under the Defense Production Act
With the federal government’s increasing focus on enforcing price gouging compliance, attention has turned to the Defense Production Act (the “DPA”). Passed in 1950 in response to the Korean War, the DPA is modelled on the War Powers Acts of 1941 and 1942 and gives the President, among other things, sweeping power to control the…
When Will It End? – Price Gouging Restrictions Remain in Place for Uncertain Period
The pandemic has demonstrated that price gouging laws are not only written in an ambiguous manner, but are ambiguous as to whether they are in effect or not. A recurring problem faced by businesses is that some states are not widely circulating information about whether their price gouging laws are still active, when they expire,…
Federal Price Gouging Enforcement Update
While the majority of price gouging enforcement has occurred at the state level (see Proskauer on Price Gouging — A Coast-to-Coast Reference Guide), the federal government has also been active, and several federal price gouging bills have been introduced, though none have been signed into law. See, e.g., S. 3574 (empowers the FTC and…
Price Gouging Compliance Practice Tips: Conduct a Price Gouging Audit
Understanding and Reacting to New and Increased Risks
Businesses are facing new and increased risks as they work to continue operations and meet changing demand. The unprecedented duration and nationwide scope of the emergency has created additional complexities for companies that operate on a nationwide basis. They often must comply with price gouging laws in…
Price Gouging Laws and the Dormant Commerce Clause?
During the pandemic, businesses are asking about their potential price gouging liability in states that they do not sell into directly but where their products might end up. At least one federal circuit court addressed this question in examining a Maryland price gouging law that covered pharmaceuticals (outside the emergency context), ultimately striking down the…
“Covid Surcharges” – Fair Game, or a Price Increase by Another Name?
As businesses figure out how to be creative and continue to operate during the pandemic, some have turned to “Covid surcharges” to account for new or increased costs. “Surcharges” may seem more benign than direct price increases. Still, they need to be considered with an eye towards compliance with local price gouging laws.…
Pricing Around the Margins: Is it Price Gouging if My Costs Have Gone Up?
Despite the continued implementation of state price gouging laws, many companies have been able to legally raise their prices by relying on exceptions related to cost increases. Many have asked whether the exception nevertheless presents risk to the extent it is used as a basis to maintain current margin levels. While this is not a settled…
Price Gouging and Services: Third-Party Food Delivery Price Gouging?
As new restrictions addressing the economic impacts of COVID-19 continue to be proposed, some are targeting price increases for services. Businesses may want to re-familiarize themselves with the “services” covered by existing price gouging laws and pay close attention to developments, as they may cover unexpected areas.…
Clearance to Reduce Capacity May Not Be Clearance to Raise Prices: Can Business Review Letters Impact Price Gouging Compliance?
In response to the current pandemic, antitrust enforcers at the Department of Justice have been issuing business review letters at record pace. One of these business review letters addressed an inquiry from the pork industry about reducing supply based on the COVID pandemic disruption. This raises the question as to whether the DOJ letter about antitrust…