House considers price gouging bill; Katrina investigations ongoing

| Tuesday, May 02, 2006

As the House of Representatives considers price-gouging legislation at the federal level, states across the country are finding that high prices alone aren’t enough to prove allegations of price gouging.

USA Today reported that Arizona’s investigation into price gouging in the wake of Hurricane Katrina in 2005 found that, while there was profiteering at all levels of the oil industry, nothing illegal took place.

Profiteering is defined by Merriam-Webster as making “what is considered an unreasonable profit especially on the sale of essential goods during times of emergency.”

Profiteering differs from price gouging in that price gouging is generally more short-term and localized, whereas profiteering covers a broader variety of activities.

USA Today reported that Washington state’s attorney general’s office also recently issued its Katrina investigation findings, which found no evidence of any illegal activity on the part of fuel retailers or producers in that state.

Though it is difficult to prove, recent increases in fuel prices have sparked another round of cries for investigations into price gouging.

The U.S. House of Representatives is scheduled to consider a bill on Wednesday, May 3 that would, for the first time, establish federal regulations against price gouging.

Congressional Quarterly reported that the bill, which was drafted by Rep. Heather Wilson, R-NM, would authorize the Federal Trade Commission to define what constitutes price gouging. The FTC would then be authorized to investigate and prosecute such cases.

The bill would also give states’ attorneys the authority to bring civil action against possible price gougers. The bill would establish civil penalties for price gouging as high as $3 million for each day of an ongoing violation. Criminal punishment could be as high as $150 million in fines and two years in prison.

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