NEW YORK, N.Y. (WKBW) — The New York State Attorney General's office has launched a process to crack down on illegal price gouging.
Attorney General Letitia James' office said Friday morning it is starting a new rule-making process to examine and address evidence that recent price hikes by major corporations were spurred by profits and not increased costs.
The AG's office will now look into whether big corporations used the COVID-19 pandemic as an excuse to charge more for necessary goods such as fuel, cars and food.
The new process is called "Advance Notice of Proposed Rulemaking" or ANPR.
It outlines the evidence that some of the price increases for vital and necessary goods may violate New York law and lays out the incentive structures that can lead to price gouging.
The ANPR also discusses the unique ways price gouging harms consumers and the justifications for banning it.
State price gouging laws bar companies from "taking advantage of a crisis to charge excessive prices for vital and necessary goods and services." Under that law, companies cannot charge "unconscionably excessive prices or prices set through unfair leverage or unconscionable means."
New York’s statute covers all actors in the supply chain for goods and services, including manufacturers, retailers, distributors, shipping firms and online platforms.
It also prohibits price gouging targeting small businesses and state and local governments.
The attorney general's office said recent corporate profit spikes are evidence some companies are profiting by increasing costs for people hit hardest by the COVID-19 pandemic.
"The rising costs of essentials and basic household items has had a real impact on working families," said James. “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.”
According to the AG's office:
- Beef prices rose 30% while meatpackers have been celebrating an average of 120% increase in profits.
- The cost of Proctor and Gamble diapers, toothpaste, detergent, and tampons has risen throughout the pandemic while Proctor and Gamble has boasted record-breaking profits.
- Chipotle prices are up 10% from January 2021 to January 2022, which the company blames on labor shortages, but their operating income rose 181%.
- While the cost of a basic cup of coffee at Starbucks has shot up 20%, the company profits are up 30%.
- Shipping prices are way up, while shipping company profit margins are breaking records.
- Chevron and Shell posted record profitability while energy costs soared.
The ANPR has been submitted to the State Register for publication and will be officially available on March 9.
The AG's office is accepting public comment on the ANPR until April 22. You can submit your comments by emailing the AG's office here.
