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The Law of Price Gouging

Shortages of gasoline in the wake of Hurricane Katrina have prompted both state and federal regulators to take steps to curtail price gouging. Legally, approaches wary widely, from those of New York Attorney General Eliot Spitzer (who has tried to apply mini-FTC Act language -- "unfair and deceptive trade practices" -- to prohibit sudden price increases) to Georgia Governor Sonny Purdue (who has the advantage of a specific Georgia statute that applies only during declared emergencies to prohibit retail price increases that are not connected to demonstrable changes in the cost of supply) to the Federal Trade Commission (which has been lobbied by some members of Congress to "investigate" claims of gouging).

What makes this multiplicity of legal approaches interesting is that some commentators question whether "gouging" really exists and, if so, whether it might actually be beneficial. (More coverage).



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.