State attorney general launches price gouging investigation

New York Attorney General Letitia James said Friday her office would examine whether companies were using the COVID-19 pandemic and inflation to price gouge consumers.

James said the state’s first-ever price gouging rule-making process would look at evidence to see whether major companies raised prices because of rising costs or because they were just capitalizing on the pandemic and inflation.

"The rising costs of essentials and basic household items has had a real impact on working families," James said in a statement. "Throughout the pandemic, hardworking New Yorkers have been struggling to make ends meet, but big corporations have been celebrating record breaking profits. It doesn’t add up. My office is prepared to use every tool in our toolbox to crack down on price gouging and pandemic profiteering."

New York State law bans "unconscionably excessive" prices, including unfair leverage, and bans price gouging of consumers, small businesses and local governments. The law includes businesses and "all actors in the supply chain" including manufacturers, distributors, shippers and online platforms.

As an example, the attorney general's office said that since the pandemic started in March 2020 beef prices have risen 30%, despite meatpackers' profits rising by an average of 120%. She also cited products such as gas and oil, food and cars.

While not all may be illegal, some may fit the definition of price gouging under New York law, James said. State law specifically bans companies from "taking advantage of a crisis to charge excessive prices for vital and necessary goods and services."

The new rule-making policy by the attorney general will investigate how companies are profiting but may not fairly be bearing the burden and costs of the pandemic.

Residents can report or comment on price gouging to the attorney general’s office through April 22 by emailing stopillegalprofiteering@ag.ny.gov. The public will then have 60 days to comment on new proposed price gouging rules.

"Price gouging or profiteering during a time of crisis is simply unacceptable. We must do everything we can to prevent unethical profiteering and stop large companies from putting profit above the lives of people," State Sen. Kevin Thomas (D-Levittown) said.

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.