Though at times a return to normalcy may seem far off, it makes sense to contemplate what the legal landscape will look like when the current COVID-19 crisis abates, and what we can do now to protect ourselves as best we can. That’s what we explore in our third and final installment on antitrust and consumer protection in a COVID-19 world. Be sure to read Part 1, “Antitrust law in a COVID-19 world: Do we care? Should we care?” and Part 2, “Price gouging during COVID-19: The flip side of competition law.”
In our first installment and podcast, we discussed antitrust enforcement in the COVID-19 era. Now, we’d like to discuss price gouging, which in many ways is the polar opposite of antitrust law. Antitrust laws are based, at least partly, on the principle that fair and open competition allows resources to be allocated most efficiently. It further assumes that fair and open competition allows goods and services to be priced efficiently, by the forces of supply and demand. Price gouging laws, on the other hand, seek to limit price increases even when those prices are being determined by fair and open competition and by the forces of supply and demand. While price gouging and other consumer protection laws certainly protect the public from the effects of hoarding and other predatory behavior during public emergencies, they also capture price increases that are a result of sharply increased demand or supply shortages that are not occasioned by any malfeasance.
In the COVID-19 era, governments at all levels have mobilized efforts to combat price gouging. State attorneys general are conducting investigations and filing suits; governors have issued executive orders declaring emergencies and expanding enforcement; the Federal government has invoked the Defense Production Act to handle problems traditionally addressed by price-gouging statutes. Companies must conduct a careful state-by-state analysis to fully appreciate the impact of these laws on their business. Continue Reading
Let’s face it, antitrust concerns probably do not top your list of legal concerns at this time. So, it is fair to ask whether companies should worry much about antitrust right now.
The short answer is, yes. The rules have not changed, and those who do not heed them now may pay dearly later. At the same time, we realize you probably have better things to do than read another alert that recites a long list of antitrust dos and don’ts. So, we will briefly summarize what has happened to date and provide some guidance for these times. This blog is part one in a three-part series dealing with antitrust and price gouging. We will also offer podcasts on these topics.
The Federal Trade Commission remains vigilant about protecting the integrity of “Made in USA” claims. This is evidenced by its recent settlement with Williams-Sonoma Inc. The FTC claimed that that the well-known home products and kitchen wares company deceptively represented that certain of its products were made in the U.S. when, in fact, they were wholly imported, or contained significant imported materials or components. Those products included its Goldtouch Bakeware products, Rejuvenation-branded products, and Pottery Barn Teen and Pottery Barn Kids-branded upholstered furniture products. Williams-Sonoma had claimed that all or virtually all of the products were made in the U.S.