On May 24, 2022, the FTC announced a widespread inquiry into the ongoing infant formula shortage. The agency had been tasked by the White House with investigating any price gouging or unfair market practices in the industry. The agency is seeking public comments on “various factors that may have contributed to the infant formula shortage…as well as its impact on families and retailers.”
A Note of Caution: Inflation, Price Increases, and the Lingering States of Emergencies
Many companies have increased prices in recent months. Reportedly, across the economy, prices “rose by 5 percent in May compared with a year ago.” Restaurants are raising prices to cover the cost of increases in wages in a tight labor market. The prices of used and rental cars are quickly rising, due to low inventory and higher demand. Gasoline prices have risen, and not just as a result of the recent cyberattack.
Is the Pipeline Interruption a Price Gouging Issue?
Last week, gas stations across much of the Southeast saw shortages, demand spikes, and price increases after a cyberattack on a major gasoline pipeline. Proskauer’s price gouging team authored a Law360 article addressing the lessons learned from the past year’s emergencies — whether related to COVID-19 or natural disasters —
Amazon to Arbitrate Price Gouging Class Action, Leaving Open Questions of Platform Liability
Class actions plaintiffs and state enforcers have tried to use state price gouging laws to hold online retailers accountable for prices set by third parties. It remains unclear, however, whether platforms will—or can, under the current legal frameworks—be held liable for price increases made by third party vendors. One of the key cases that could shed some light on this issue, discussed last summer, has been put on hold, pending the completion of arbitration.
Sixth Circuit Remands Price Gouging Case, Allows Kentucky AG to Resume Investigations
The Sixth Circuit issued its opinion in the Online Merchants Guild v. Cameron case on April 29, 2021, dissolving a preliminary injunction that had prevented the Kentucky Attorney General from investigating alleged violations of Kentucky’s price gouging laws, and remanding to the district court for further proceedings.
The FTC’s Enforcement Power: How AMG Reshapes the Landscape
In a unanimous opinion, the U.S. Supreme Court held that Section 13(b) of the FTC Act does not authorize the Federal Trade Commission to seek monetary relief in the form of restitution or disgorgement, despite the agency’s redoubled practice of seeking such relief under the Act since 2012. The Court’s
One to Watch: Constitutional Challenges to NYC’s Price Gouging Rule
On March 18, 2021, retailer Union Square Supply, Inc. filed a civil rights class action lawsuit in the Southern District of New York challenging New York City’s price gouging enforcement practices. The complaint alleges that defendants are responsible for “the creation and maintenance of an illegal and unconstitutional penalty enforcement scheme, abuse of emergency powers, and other misconduct that improperly assesses penalties and fines on businesses without any notice or due process.”
Good Cause for Surcharges
Almost a year into the business disruptions caused by the pandemic, businesses continue to find ways to adapt and to comply with new pricing restrictions. Some of these changes relate to additional costs that businesses may need to pass along to consumers — at least in part. Given what we have seen in recent months, it is worth revisiting how businesses can implement these surcharges with an eye towards compliance with local price gouging laws.