Price gouging
Price gouging is similar to profiteering but can be distinguished by being short-term and localized and by being restricted to essentials such as food, clothing, shelter, medicine, and equipment needed to preserve life and property.
During the pandemic, the idea of 'greedflation' or 'seller's inflation' also moved out of the progressive economics fringe by 2023 to be embraced by some mainstream economists, policymakers and business press.
California permits emergency proclamations by officials, boards, and other governing bodies of cities and counties to trigger the state's price gouging law.
In 2004, Florida determined that one-third of complaints were unfounded, and a large fraction of the remainder was handled by consent decrees, rather than prosecution.
[19] Due to complaints from the district attorney that she could not prosecute high priced new rentals which came on the market after the Tubbs Fire, the legislature amended C.P.C.
[19] The above 2018 price gouging law makes it illegal to offer a previously unrented property for more than about $10,000 per month during an emergency.
[citation needed] Chapter II of the UK Competition Act 1998 prohibits businesses with market dominance from engaging in "abusive" conduct, including "unfair" pricing.
As stated, "such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions..." In 2016, the EU Commissioner for Competition Margrethe Vestager stated that the EU Commission will "intervene directly to correct excessively high prices" specifically within the gas industry, pharmaceutical industry and in cases of abuse of standard-essential patents.
[27] As studied by the National Institutes of Health, the COVID-19 pandemic induced a panic as mandates were put in place for Americans to stay at home, quarantine, and wear masks.
More than 30 states' attorneys general urged Facebook, Amazon, Craigslist, eBay, and Walmart to restrict the selling of necessary products at "unconscionable" prices.
[30] This complaint relates to online merchants selling necessary products on Amazon during the US national state of emergency invoked in response to the COVID-19 pandemic.
[31] Judge Gregory Van Tatenhove sided with the Online Merchants Guild on June 23, 2020, saying that the Kentucky Attorney General cannot enforce the price gouging regulations on Amazon sellers.
[34] A Mississippi businessman purchased scarce personal protective equipment (PPE) including gowns, face shields, and masks through his pharmaceutical wholesale company.
[5] According to Friedrich Hayek in "The Use of Knowledge in Society" (1945), prices can act to coordinate the separate actions of different people as they seek to satisfy their desires.
[40] In a 2012 survey of leading[non-primary source needed] American economists by the Initiative on Global Markets, only 8 percent agreed with a proposal in Connecticut to prohibit "unconscionably excessive" price increases during severe weather events.
[41][non-primary source needed] In 2022, Federal Reserve Bank of St. Louis economist Christopher J. Neely said that "most economists believe broad price controls to be costly and ineffective in most situations" because high prices function to "allocate scarce goods and services to buyers who are most willing and able to pay for them, [and] they signal that a good is valued and that producers can profit by increasing the quantity supplied.
"[42] A 2022 Working Paper by the International Monetary Fund explores the implementation of windfall profit taxes, which have gained renewed interest following the COVID-19 pandemic, the war in Ukraine, and subsequent surges in energy and food prices.
[43] In Australia in 2023 and 2024, major supermarket chains Coles and Woolworths received criticism as price gouging, especially in less competitive markets.
