Attorney General Gouges Hopes of Those Attempting to Raise Prices Above Industry Standard

Attorney General Gouges Hopes of Those Attempting to Raise Prices Above Industry Standard

by Mindy Cohn

State Attorney General Letitia James has taken a stand against price gouging by proposing laws to institute New York's definition of what exactly price gouging is.

The proposal, one of a series of rules the State Attorney is presenting for public comment, would create a new definition of price gouging for New York businesses as any increase over 10 percent during an abnormal disruption in the market. An abnormal disruption could include labor strikes, a weather event, civil disorder, war, national or local emergencies, as well as disruptions declared by the governor based on a state of emergency.

The 10 percent threshold, if accepted, will clarify things for New York business owners by clearly defining the current standard for price gouging as well as what an abnormal distribution to the market is.

In addition to the 10 percent threshold,  the State Attorney's office also suggests prohibiting corporations with large product market shares from increasing their profits during abnormal market activity. 

The State Attorney's office is also working to establish standards for price gouging relative to companies with fluctuating pricing. This would include services like Uber and Lyft, whose definition of price gouging would be based on dynamic pricing, the median price at the same time or for one week prior. The new dynamic pricing standard would be similar to a 2014 price gouging agreement with Uber which expired in 2017.

The state's proposed unfair leverage rule for price gouging would also encompass companies with thirty percent or more of the market share or companies with five or fewer significant competitors. In such instances, companies would be charged with price gouging for any increase in their "non-cost" prices.

Photo Credit: Flickr

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