Federal Trade Commission (FTC)

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New York State Attorney General Letitia James has filed a petition to compel Tyson Foods to comply with a subpoena in connection with ongoing price gouging investigations by the state.  New York’s price gouging statute imposes civil penalties on sellers of essential goods charging unconscionably excessive prices during an abnormal disruption of the market.  The subpoena requests information relating to prices, dates of sale, purchasers, costs, and profit margin for Tyson’s meat products sold in New York from December 1, 2019 through April 2022.

On July 11, 2022, the United States District Court for the District of Kansas approved a $264 million settlement against Mylan and certain of its subsidiaries in the case In Re EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices, and Antitrust Litigation in a matter broadly tagged as price-gouging litigation. Plaintiffs filed class action lawsuits against Mylan, the owner of EpiPen, and Pfizer, Inc., a manufacturer and seller of EpiPen, alleging, “anticompetitive conduct including, among other things: engaging in a ‘hard switch’ and selling EpiPens only in packs of two; entering into discount agreements with schools that were conditioned on the schools not purchasing competing products; securing multiple overlapping patents on minor changes to the EpiPen and engaging in ‘sham’ patent litigation to forestall generic competition; and paying excessive rebates to commercial insurance companies, pharmaceutical benefits managers, and state-based Medicaid agencies conditioned on those companies and agencies not reimbursing the use of competing products.” The plaintiffs claimed that the defendants broke various state antitrust laws and the federal civil RICO statute. The suits, filed in the Northern District of Illinois, the District of Kansas, the District of New Jersey, and the Western District of Washington, were joined in August of 2017 in the District of Kansas.

Last month, the FTC issued a report to Congress advising governments and companies to exercise “great caution” in using artificial intelligence (“AI”) to combat harmful online content.  The report responds to Congress’s request to look into whether and how AI may be used to identify, remove, or otherwise address a wide variety of specified “online harms.”  Among the “harms” covered by Congress’s request were impersonation scams, fake reviews and accounts, deepfakes, illegal drug sales, revenge pornography, hate crimes, online harassment and cyberstalking, and misinformation campaigns aimed at influencing elections.

Lawmakers in Washington, D.C., and California have taken recent steps to further protect the infant formula market from price gouging. On June 7, 2022, the D.C. Council passed the “Infant Formula Consumer Protection Emergency Act.” The Act, which will remain in effect for 90 days, targets companies selling baby formula at extremely high prices. The Act provides that companies may be subject to a $5,000 fine, for first-time offenses, or a $10,000 fine, for subsequent offenses, if they sell infant formula at a price greater than 20% of what they previously sold substantially similar formula in the District over the 90-day period prior to February 17, 2022. If the retailer never sold a substantially similar formula product in that 90-day period, they would face fines if they sell infant formula at a price greater than 20% of the average price of substantially similar infant formula product from substantially similar retailers.

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.”

Two federal price gouging bills were recently introduced in Congress. Senator Elizabeth Warren led the introduction of the Price Gouging Prevention Act of 2022. The bill prohibits “unconscionably excessive price[s]” at any point in a supply chain or distribution network during an “exceptional market shock” triggered by a range of events – including public health emergencies. The law would apply to any good or service offered in commerce, and would authorize the Federal Trade Commission and State Attorneys General to enforce the prohibition.  Additionally, during “exceptional market shocks,” the law would require public companies to disclose and explain changes in pricing and gross margins in quarterly SEC filings—raising the specter of SEC enforcement with respect to those disclosures.

Over the past year, the Department of Justice (“DOJ”) has increasingly been hot on the heels of suspected anti-competitive labor violations.  To date, the DOJ has brought a few actions against employers across industries relating to wage-fixing and no-poach agreements.  As these cases take hold, and potentially even head toward trial, this article examines the DOJ’s previous statements and current actions regarding its stance on anti-competitive labor violations.

In 1984, the Supreme Court ruled unanimously that courts must defer to an administrative agency’s reasonable interpretation of an ambiguous statute. But last year, the Supreme Court stripped the FTC of its ability to seek equitable monetary remedies such as disgorgement or restitution. And a couple weeks ago, the Supreme Court dismantled the Occupational Safety and Health Administration’s (“OSHA”) vaccine mandate, with Justice Gorsuch writing that the decision prevents OSHA from becoming a “roving commission to inquire into evils and upon discovery correct them.” The Supreme Court may be positioning itself to say something similar about the FTC.