The gravity of the pandemic is palpable, and seemingly constant news about it is hard to escape, with recent reports including updates on the availability of vaccines, the changing scope of various stay-at-home orders, and the perceived risks of new COVID-19 variants.  But there will come a time—perhaps sooner than the pessimists predict—when this will no longer be the all-consuming story it has been for the past ten months.  In this post, we address a few of the strongest reasons that most pricing restrictions may be lifted before the start of the next school year.

A Patchwork of Laws May Be Supplanted by a Robust Federal Response. In the United States, we seem to be getting some measure of control over the spread of the virus.  The truer that becomes, the less emergency orders and price gouging restrictions are necessary or justifiable.  As vaccinations increase, a return to normalcy may be in sight.  Dr. Fauci, the president’s chief medical adviser on COVID-19 and the country’s leading expert on infectious disease, has estimated that a critical amount of the population could be vaccinated by the end of the summer.

In addition to this aggressive plan for vaccinations, in its National Strategy for the COVID-19 Response and Pandemic Preparedness, released January 21, the Biden Administration committed itself to “[i]dentify and take steps to limit price gouging and promote reasonable pricing.”  The strategy goes on to assure the public that “the federal government will use its full powers to prevent hoarding and price gouging, including by reviewing and expanding the designated scarce materials under the DPA.”  It is possible that robust price gouging guidance from the federal government, coupled with meaningful increases in herd immunity, will obviate the need for the piecemeal assembly of state and local controls that have been the norm.

Unpopularity of Some State Emergency Declarations. The unpopularity of state emergency declarations could create enough pressure for local leaders to consider how long they are truly necessary.  This has been a live issue for months, notably with the Michigan Supreme Court weighing in on the validity of emergency orders (and the price gouging restrictions therein).  In a growing number of states, lawmakers are attempting to limit the authority of state leaders to impose emergency restrictions.  Recently, lawmakers in Washington state introduced a bill that would limit the scope of the governor’s emergency declaration, requiring separate emergency proclamations for each county and mandating that any such proclamations would need to be reauthorized by the state legislature or legislative leaders after 14 days.  As we approach a full year of living under various emergency declarations, and given the anticipated relief on the horizon due to the rollout of vaccines, states may be more willing to walk back their controls.

Price Gouging Laws May Not Help As Much As Some Think. Price gouging laws can have unintended consequences.  A recently published peer-reviewed article by Gavin Roberts, assistant professor of economics at Weber State, and Rik Chakraborti, assistant professor of economics at Christopher Newport University, sheds light on how price gouging laws have actually affected consumers during the early stages of the COVID-19 pandemic.  Their article, published in the Journal of Private Enterprise, analyzed publicly available internet search data from Google Shopping Trends “to track web searches as a proxy for in-store shortages,” and found notable differences between the data in states with and without price gouging laws.  The research suggests, at least preliminarily, that rather than protecting consumers, price gouging laws actually “caused in-store shortages” of in-demand items like hand sanitizer and toilet paper, driving consumers to need to search for available supplies.  The authors note that while “[i]t is not clear from [their] results whether total consumer welfare is increased or decreased as a result of anti-gouging laws, … the possibility of increased search costs is an issue that should be considered in future research[.]”

Choosing to roll back price gouging restrictions would have a very different impact today than it would have eight or ten months ago.  With a few notable exceptions—for N95 masks, for example—the supply chain concerns from the early weeks of the pandemic are no longer present to the same degree.  Many suppliers have been able to adapt to meet changing demands, such as providing more food to grocery stores and less to schools.  At this stage, most may be less concerned about shortages and feel safer letting market forces determine prices.

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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

When competition or antitrust questions arise, John Ingrassia is sought out for his knowledge, reputation and credentials.

John is a recognized authority on Hart-Scott-Rodino antitrust merger review, and for more than 20 years has counselled businesses facing the most challenging antitrust issues and…

When competition or antitrust questions arise, John Ingrassia is sought out for his knowledge, reputation and credentials.

John is a recognized authority on Hart-Scott-Rodino antitrust merger review, and for more than 20 years 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 or joint ventures.

John is a senior counsel at the Firm, advising on the full range of antitrust matters in diverse industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services and health care, among others.  His practice focuses on the analysis and resolution of antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger notification requirements. John has extensive experience with the legal, practical, and technical requirements of merger clearance and is regularly invited to participate in Federal Trade Commission and bar association meetings regarding Hart-Scott-Rodino practice issues.

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.

Photo of Jennifer Tarr Jennifer Tarr

Jennifer E. Tarr is a senior associate in the Litigation Department, and a member of Proskauer’s Sports Law and Antitrust Groups. She regularly litigates on behalf of sports leagues and counsels clients active in the sports industry on a variety of matters, including…

Jennifer E. Tarr is a senior associate in the Litigation Department, and a member of Proskauer’s Sports Law and Antitrust Groups. She regularly litigates on behalf of sports leagues and counsels clients active in the sports industry on a variety of matters, including issues pertaining to antitrust, team relocation, league governance, contract disputes, sponsorship and fan-league relationships.

In addition to sports antitrust work, Jennifer also has experience counseling and defending clients on issues related to mergers and acquisitions, claims related to unlawful conspiracy and anticompetitive agreements, monopolization claims, and price fixing claims. Jennifer is also a member of the firm’s price gouging team.

In 2019, she was a panelist on the Environmental Law Institute’s Managing Private Sector Environmental Initiatives panel, where she spoke about the Antitrust Implications of Corporate Environmental Collaborations.

Jennifer maintains an active pro bono practice and is a member of the Firm’s Pro Bono Committee. She received Proskauer’s Golden Gavel Award for excellence in pro bono work in 2018 and 2019.

Prior to joining Proskauer, Jennifer clerked for the Honorable Lorna G. Schofield on the United States District Court for the Southern District of New York. She also was a Staff Attorney at the Environmental Law & Policy Center, where she represented clients as lead counsel in litigation before multiple federal district and appellate courts and in federal mediation.

While in law school, Jennifer was a member of the Harvard Legal Aid Bureau, one of three honors societies at the law school and the nation’s oldest student-run legal services center. In that capacity, she argued and won a case of first impression before the Massachusetts Supreme Judicial Court. She also argued over 20 motions in state trial court and successfully represented clients in federal mediation and before federal administrative tribunals.