Six months into the states of emergencies triggered by the COVID-19 pandemic, there is a sizeable amount of data on how prices have actually moved, potentially leading to more private actions as plaintiffs’ now have the opportunity to review prices retroactively and establish claims based on hard data.

Reports have noted the impact of the pandemic on food and drug prices, for example. In a recent post, we flagged a report from a consumer watchdog group, noting how it leveraged some of that that data to shine light on a handful of notable price increases for products sold by and through Amazon during the pandemic. The group analyzed pricing on a handful of productsfrom May through August, and found that prices had been marked up well in excess of many price gouging limitations, including, for example, price increases of up to 425% on flour sold by Amazon and up to 941% increases on flour sold by third-party sellers through Amazon.

A class action proceeding pending against Amazon based on price gouging allegations was filed in April. Private actions have also been filed against other retailers and online platforms related to purchases of goods such as N-95 masks, disinfectants, eggs, and even wine storage. This is likely only the tip of the iceberg.

While most states of emergency remain in effect, companies have likely acclimated to many of the present economic and social challenges. Companies and industries that have not yet been targeted by state attorneys general or private plaintiffs are not necessarily out of the woods with respect to price gouging allegations. Indeed, it is extremely unlikely that Amazon will be the only company facing this sort of backward-looking attention from advocacy groups, let alone from plaintiffsgiven the time and opportunity to review months of data.

Pricing data alone may not tell the whole story.  Price gouging laws – which have received limited analysis in the past – are subject to limitations, based on potential ambiguities, exceptions and defenses. The raw data does not control for factors affecting prices paid by consumers, nor will it isolate the impact of industry-specific facts, cost or supply factors, and the nature of demand. The prudent course is to document any justifications for pricing movements so that defenses are at the ready in the event claims are made or investigations are initiated against your company.

 

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Visit Proskauer on Price Gouging for antitrust insights on COVID-19.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Photo of Christopher E. Ondeck Christopher E. Ondeck

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters…

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters for clients in a number of industries, including advertising, aerospace, alcoholic beverages, appliances, building materials, consumer products, defense, franchise, medical devices, metals, mining, natural resources, oil and gas, packaging, pharmaceuticals, software and telecommunications. He also has developed substantial experience advising clients regarding the application of the antitrust laws to the pharmaceutical industry, the agriculture industry, trade associations and the energy industry.

Photo of John R. Ingrassia John R. Ingrassia

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating…

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating to competition and antitrust, CFIUS or foreign investment issues.

For more than 25 years, John has counselled businesses facing the most challenging antitrust issues and helped them stay out of the crosshairs — whether its distribution, pricing, channel management, mergers, acquisitions, joint ventures, or price gouging compliance.

John’s practice focuses on the analysis and resolution of CFIUS and antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger CFIUS and HSR notification requirements. He advises clients on issues related to CFIUS national security reviews, and on CFIUS submissions when non-U.S. buyers seek to acquire U.S. businesses that have national security sensitivities.  He also regularly advises clients on international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign merger control regimes.

His knowledge, reputation and extensive experience with the legal, practical, and technical requirements of merger clearance make him a recognized authority on Hart-Scott-Rodino antitrust merger review. John is regularly invited to participate in Federal Trade Commission and bar association meetings and takes on the issues of the day.

Photo of Kelly Landers Hawthorne Kelly Landers Hawthorne

Kelly Landers Hawthorne is an associate in the Litigation Department.

While at Columbia, she served as an articles editor of the Columbia Journal of Law & the Arts and was involved with the Lawyering in the Digital Age Clinic.  She also worked as…

Kelly Landers Hawthorne is an associate in the Litigation Department.

While at Columbia, she served as an articles editor of the Columbia Journal of Law & the Arts and was involved with the Lawyering in the Digital Age Clinic.  She also worked as a judicial intern for the Honorable Sandra Townes of the United States District Court for the Eastern District of New York.

Kelly is a Teach For America alumnus and taught middle school special education and math in Washington, D.C. prior to law school.