Chicago – Attorney General Kwame Raoul, as part of a coalition of 15 attorneys general, is urging Congressional leaders to pass a national ban on price gouging. While price gouging is unlawful in Illinois and more than 40 other states, there is no federal law specifically banning businesses from raising prices on essential goods to increase their profits during an emergency.
“Price gouging limits public trust in the marketplace and takes clear advantage of consumers,” Raoul said. “While my office’s Consumer Fraud Bureau continues to take on bad actors who exploit consumers for their own financial gain, a national price gouging ban would expand the ability to address this nefarious practice wherever it occurs.”
In their letter to Congressional leaders, Raoul and the coalition argue that a national ban on price gouging would give the federal government the power to crack down on the practice when it cannot be stopped by a single state. 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 enforcement by individual states. A national ban would complement states’ anti-price gouging measures and also allow states and the federal government to work together to stop illegal price gouging in national supply chains.
Raoul and the coalition point out that 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. They also argue that prohibiting price gouging benefits both consumers and businesses by encouraging much-needed production at critical times. This would prevent businesses from risking long-term harm and reputational damage by overreacting in an emergency and setting prices too high and would discourage hoarding since rising prices and perceived scarcity can prompt customers to over-buy. Businesses would also have an incentive to enforce anti-hoarding rules if they cannot take advantage of wealthy customers by raising prices. Finally, banning price gouging protects consumers from monopolists who can raise prices without worrying about consumers’ reactions or being undercut by a competitor.
Joining Raoul in sending today’s letter are the attorneys general of California, Connecticut, Delaware, the District of Columbia, Hawaii, Maine, Maryland, Michigan, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Vermont.
