October 28, 2020

Volume X, Number 302

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October 26, 2020

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Spotlight on Past Price Hikes: Anticipating and Establishing Defenses to Price-Gouging Class Actions

Six months into the states of emergencies triggered by the COVID-19 pandemic, there is a sizeable amount of data on how prices have actually moved, potentially leading to more private actions as plaintiffs’ now have the opportunity to review prices retroactively and establish claims based on hard data.

Reports have noted the impact of the pandemic on food and drug prices, for example. In a recent post, we flagged a report from a consumer watchdog group, noting how it leveraged some of that that data to shine light on a handful of notable price increases for products sold by and through Amazon during the pandemic. The group analyzed pricing on a handful of productsfrom May through August, and found that prices had been marked up well in excess of many price gouging limitations, including, for example, price increases of up to 425% on flour sold by Amazon and up to 941% increases on flour sold by third-party sellers through Amazon.

A class action proceeding pending against Amazon based on price gouging allegations was filed in April. Private actions have also been filed against other retailers and online platforms related to purchases of goods such as N-95 masks, disinfectants, eggs, and even wine storage. This is likely only the tip of the iceberg.

While most states of emergency remain in effect, companies have likely acclimated to many of the present economic and social challenges. Companies and industries that have not yet been targeted by state attorneys general or private plaintiffs are not necessarily out of the woods with respect to price gouging allegations. Indeed, it is extremely unlikely that Amazon will be the only company facing this sort of backward-looking attention from advocacy groups, let alone from plaintiffsgiven the time and opportunity to review months of data.

Pricing data alone may not tell the whole story.  Price gouging laws – which have received limited analysis in the past – are subject to limitations, based on potential ambiguities, exceptions and defenses. The raw data does not control for factors affecting prices paid by consumers, nor will it isolate the impact of industry-specific facts, cost or supply factors, and the nature of demand. The prudent course is to document any justifications for pricing movements so that defenses are at the ready in the event claims are made or investigations are initiated against your company.

 

© 2020 Proskauer Rose LLP. National Law Review, Volume X, Number 269
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About this Author

Christopher Ondeck, Antitrust Litigator, Proskauer Rose, law firm
Partner

Chris Ondeck is a partner in the Litigation Department and vice-chair of the Antitrust Group. He focuses his practice on representing clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters for clients in a number of industries, including advertising, aerospace, alcoholic beverages, appliances, building materials, defense, medical devices, metals,...

202-416-5865
John Ingrassia, Antitrust Attorney, Telecommunications, Proskauer Law firm
Special Counsel

John Ingrassia is a special counsel and advises clients on a wide range of antitrust matters in various industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services, health care, and others. His practice includes a significant focus on the analysis of Hart-Scott-Rodino pre-merger notification requirements, the coordination and submission of Hart-Scott-Rodino filings, and the analysis and resolution of antitrust issues related to mergers, acquisitions, and joint ventures. John has extensive experience with the legal, practical, and technical requirements of the Hart-Scott-Rodino Act, and is regularly invited to participate in Federal Trade Commission and bar association discussions regarding Hart-Scott-Rodino practice issues. 

John also advises clients regarding international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign competition filing regimes, and liaising with local counsel to coordinate foreign pre-merger notifications and ensure the efficacy and consistency of the competition law theories advanced.

202.416.6869
Kelly Landers Hawthorne, Proskauer Law Firm, New York, Litigation Attorney
Associate

Kelly Landers Hawthorne is an attorney in the Litigation Department.

Education

  • Columbia Law School, J.D., 2017

  • George Mason University, M.Ed., 2013

  • University of Richmond, B.A., 2011

212-969-3537
Law Clerk

Nathaniel Miller is a Law Clerk in the litigation department. He works for the firm's New York offices. 

Education

  • New York University School of Law, J.D., 2017
  • Harvard University, B.A., 2014
212-969-354
Nicollette R. Moser Litigation & Antitrust Proskauer Rose Washington, DC
Associate

Nicollette Moser is an associate in the Litigation Department and a member of the Antitrust Group.

Related Practices

  • Litigation
  • Antitrust

Admissions & Qualifications

  • District of Columbia
202.416.5862
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