Price Gouging Law & Legal Definition


At least 13 states — Alabama, Arkansas, Florida, Georgia, Indiana, Louisiana, Mississippi, New York, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia — have enacted statutes to deal with price gouging in the event a state of emergency is declared. Other states may address price gouging under general deceptive trade practice laws, depending on the nature of the state law and the specific circumstances under which price increases occur. Price gouging is often hard to define, and is often described vaguely as charging "unconscionably" high prices. For example, price gouging may be defined as renting, selling or offering to rent or sell a commodity at an "unconscionable price".

Price gouging statutes seek to stem opportunistic behavior, which is designed to take advantage of an unforeseen opportunity to charge a monopoly price by threatening to withhold output. It is often defined as a 10 to 25 percent increase over prices during the month before an emergency. One state defines “unconscionable price” as an amount charged, which either represents a “gross disparity” or “grossly exceeds” the average price available for these items and services in the same area 30 days immediately before a declaration of a state of emergency.