Connecticut Seeks Tougher Price Gouging Enforcement

CONNECTICUT — State Attorney General William Tong announced he is seeking new legislation to strengthen the state's ability to combat price gouging.

Limitations in existing price gouging statutes curtailed Connecticut's ability to crack down on some of the worst actors that sought to take advantage of severe shortages in protective equipment and essential goods, according to Tong. New proposed legislation would give enforcement sharper teeth.

The proposed legislation addresses three core shortcomings in the existing statute, as identified by the AG:

• Expanding Beyond Retail: The state’s current price gouging statute only applies to retail sales, excluding wholesale and sales within the supply chain. During the pandemic, many state investigations of alleged price gouging behavior revealed that although the retail price of the item in question had increased, sometimes dramatically, the retail seller was not responsible for that increase. Rather, the cost of the item charged by the wholesaler to the retailer had increased, forcing the retailer to raise the price at the point of sale. In many cases, Connecticut retailers reduced their normal mark-ups in an effort to keep retail prices lower. Amending the price gouging statute to apply up and down the entire supply chain will better protect consumers by expanding and strengthening our ability to combat price gouging behavior.
• Clearly Defining Price Gouging Behavior: The current price gouging statute defines price gouging as an increase in "the price of any item" during a declared emergency, unless the increases are due to, "fluctuation[s] in the price of items sold at retail which occur[] during the normal course of business." This language does not offer clear guidance to consumers, businesses, or the Office of the Attorney General as to what may constitute price gouging behavior that is prohibited in Connecticut. The proposed legislation would define price gouging to prohibit the sale of certain goods or services "for an amount which represents an unconsciously excessive price." This language mirrors language regarding energy resources during emergencies, and also matches language in New York’s price gouging statute.
• Including Rentals and Leases: While the current statute states that "[n]o person, firm or corporation shall increase the price of any item," questions remained as to whether it applied only to items sold or whether it also applied to rentals and leases. The proposed legislation would clarify the applicability of the statute here, joining other states that specify it is unlawful to rent or lease products and services at an unconscionable price.

The effort to harden the legislation is being led in Hartford by Tong, State Sen. James Maroney (14th District), and Rep. Michael D'Agostino (91st District).

"Profiteering off pain and panic during a crisis is wrong, and against the law. We are seeking new legislation to strengthen our ability to hold price gougers accountable and protect consumers," said Tong. "We received over 750 COVID-related price gouging complaints last year, and thoroughly reviewed each and every one. We are talking about massive price increases on essential and life-saving items like masks, sanitizer and even toilet paper. It became clear early on that the existing price gouging statute was severely limited and did not adequately protect families and businesses. I look forward to working with the legislature this session to reform the statute and strengthen our ability to combat price gouging behavior."

Tong will testify in favor of the proposed legislation before the General Law Committee of the Connecticut General Assembly on Thursday.