Price gouging during the COVID-19 pandemic
Guidance on coronavirus resources and warnings about consumer scams
New York's price-gouging statute, section 396-r of the New York General Business Law, prohibits charging unfairly excessive prices for essential goods and services during events that abnormally disrupt 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
- medical supplies and services used for the care, cure, mitigation, treatment or prevention of illness or disease
- goods and services used to promote the health or welfare of the public
The statute prohibits price gouging by all parties in the distribution chain. This includes retailers as well as manufacturers, wholesalers, and distributors. The Office of the New York State 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 OAG considered the following consumer goods as essential:
- at-home COVID-19 testing kits
- 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 health care facilities or by businesses for use by their employees (e.g., restaurants, retail stores, pharmacies, etc.)
What constitutes an unconscionably excessive price?
This is defined as being when either:
- The charged amount is significantly greater than the price of the goods or services in the usual course of business immediately before the market was abnormally disrupted.
- The charged amount is greatly more than the price for similar goods or services readily available nearby.
What are the penalties for engaging in price gouging?
Anyone engaging in price gouging may be required to pay back affected 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 charging excessive prices for items that have been declared in short supply. These items currently include: 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 can I file a complaint about price gouging with the Office of the New York State Attorney General?
We invite consumers and merchants to report instances of price gouging.
Merchants who believe their distributors are charging unfairly excessive prices for essential consumer goods or services can report such instances without fear of enforcement action by the Attorney General's Office, as long as they have not also engaged in independent price gouging.