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
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.