Golden State Today

California Attorney General Rob Bonta, along with 16 other attorneys general, has advocated for a federal prohibition on price gouging. While 40 states, including California, have laws against price gouging, there is currently no federal legislation addressing the issue. The lack of a nationwide law presents challenges for states in protecting consumers from excessive pricing practices that often occur across state lines.

"During and after a crisis, it is unfair — and harmful to our economy —for companies to reap higher profits for selling goods and services that families need to survive. That is why California’s price gouging law protects Californians during and after wildfires, severe weather storms, and other emergencies," said Attorney General Bonta. "A federal price gouging prohibition that complements state law would build on successful partnerships between states and the federal government to protect consumers by making it easier to enforce price gouging prohibitions nationally, up the supply chain. This would benefit California consumers and small businesses who currently bear the brunt of their suppliers’ price setting."

Price gouging occurs when sellers exploit consumers during emergencies by significantly increasing prices for essential goods and services. These prohibitions are not intended as permanent price caps but rather temporary limits on profit increases during crises.

The attorneys general argue that without federal regulations, larger companies can raise prices beyond state control, impacting smaller businesses negatively. A federal prohibition would enable agencies like the Federal Trade Commission to manage irrational price hikes throughout supply chains effectively.

In their letter, they highlight several benefits of such laws: preventing inefficient pricing overreactions during crises; encouraging production of essential supplies; preventing hoarding; and maintaining competitive prices.

Attorney General Bonta joined his counterparts from New York, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Oregon, New Jersey, New Mexico, Pennsylvania, Vermont, and the District of Columbia in this initiative.

In California specifically under Penal Code Section 396 it is illegal to engage in price gouging during emergencies. Residents suspecting such practices are encouraged to report them locally or through the Attorney General's office at oag.ca.gov/report.

For more information about price gouging regulations visit DOJ's FAQs page.