Price Gouging During the COVID-19 Pandemic

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New York's price gouging statute, section 396-r of the New York General Business Law (GBL) prohibits charging unconscionably excessive prices for essential goods and services during periods of an abnormal disruption of the market. The statute applies to goods and services that are vital and necessary to the health, safety and welfare of consumers and the general public. These include:

  • Essential consumer goods and services provided primarily for personal, family or household purposes;
  • Essential medical supplies and services used for the care, cure, mitigation, treatment or prevention of illness or disease; and
  • Essential goods and services used to promote the health or welfare of the public.

The statute prohibits price gouging by all parties in the chain of distribution. This includes retailers as well as manufacturers, wholesalers, and distributors. The New York Attorney General is charged with enforcing the statute and may also promulgate rules and regulations.

What are examples of consumer goods (used for personal, family, or household purposes) that are considered essential?

During the COVID-19 pandemic, the Attorney General has considered the following consumer goods as essential:

  • Hand sanitizing products
  • Disinfectants (e.g., wipes, liquid, sprays)
  • Rubbing alcohol
  • Toilet paper and tissues
  • Basic food supplies (e.g., milk, eggs, bread, rice, flour, yeast, etc.)
  • Infant formula, diapers, and baby food
  • Basic medications and supplies (e.g., over-the-counter medications, vitamins, thermometers, pulse oximeters, blood pressure cuffs, etc.)
  • Other essential products (e.g., adult diapers, feminine hygiene products, etc.)

Because the CDC recommends that individuals wear “cloth face coverings” that consumers can make on their own, and not surgical masks or N-95 respirators, facemasks for personal, household, or family use are not being considered as subject to the state price gouging statute.

What are examples of essential medical goods and goods necessary to promote the health and welfare of the public?

  • Personal Protective Equipment (PPE) used by health care workers, including surgical facemasks, N-95 respirators, disposable medical gloves, disposable medical gowns, face shields, goggles, and ventilators.
  • Hand sanitizing products, disinfectants (wipes, liquid, sprays), and rubbing alcohol used in a health care facility or by businesses for use by their employees (e.g., restaurants, retail stores, pharmacies, etc.)

What constitutes an unconscionably excessive price?

  • The amount charged represents a gross disparity between the price of the goods or services sold and their value measured by the price at which such consumer goods or services were sold or offered in the usual course of business immediately prior to the onset of the abnormal disruption of the market, or
  • The amount charged grossly exceeded the price at which the same or similar goods or services were readily obtainable by other consumers in the trade area.

What are the penalties for engaging in price gouging?

Anyone engaging in price gouging may be required to make restitution to aggrieved consumers and is subject to a penalty of up to $25,000 for each violation or three times the gross receipts for the overcharged goods or services (whichever is greater).

New York City Emergency Regulations

Merchants in New York City must also comply with the emergency regulations currently in effect in New York City. Under the Rules of the City of New York (6 RCNY §5-38), stores are prohibited from selling items that have been declared in short supply at excessively increased prices. These items currently include the following: cleaning products, diagnostic products and services, disinfectants (e.g., wipes, liquids, sprays), facemasks, gloves, hand sanitizers, medicines, paper towels, rubbing alcohol, soap and tissues. For more information, visit the New York City Department of Consumer Affairs.

How to file a complaint about price gouging with the Attorney General: Consumers and Merchants?

The Attorney General invites consumers and merchants to report instances of price gouging.

Merchants who believe their distributors are charging unconscionably excessive prices for essential consumer goods or services can report such instances without fear of enforcement action by the Attorney General as long as the merchant has not also engaged in independent price gouging.

Whether you are a consumer or merchant, if you have information about price-gouging under the New York state price gouging statute, you can submit a complaint to the Attorney General's Office.