Sunday, September 28, 2008
Editorial: Improve Virginia's price-gouging law
The current law is too strict about when an investigation may occur -- and who may be investigated.
From the RoundTable blog
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Those who prey on people during a tragedy represent a particularly loathsome sort of subhuman. Consumed with profit, price gougers charge unconscionable prices during a calamity and make a bad situation worse.
Virginia properly has little tolerance for such behavior. The commonwealth outlaws it, yet partly hamstrings investigators. One lawmaker proposes beefing up the price-gouging law.
When Hurricane Ike tore through the Gulf of Mexico, Virginians felt some of the effects. Prices at the gas pump spiked, jumping 50 cents or more per gallon in some places. Consumers cried foul. Nearly 2,500 contacted the state to accuse gas stations of price gouging.
And here is where the benefit of the anti-gouging law lies. Investigators found that nearly all of the complaints were unfounded.
Outlawing and investigating price gouging certainly serves as a statement of principle and a means of punishing odious business practices. Most often, though, it is about assuring consumers that high prices were justified and giving businesses a shield to hold up that says, "See, we weren't ripping you off." That eases tensions between buyers and sellers after a disaster.
Yet Virginia's anti-gouging law almost prevented those investigations. It only kicks in when there is a declared emergency. Fortunately, when Ike hit Texas, Virginia was still in a state of emergency from Tropical Storm Hanna. Had there been no emergency, there would have been no investigations.
Del. Ward Armstrong, D-Henry County, recognizes that commodities travel great distances to fill shelves and tanks. Far-flung disasters affect the commonwealth. He therefore proposes expanding the law to apply when disasters anywhere affect supplies here. It is an obvious change that reflects the modern marketplace.
He also would give investigators the authority to look further up the supply chain. If a big oil company price-gouges distributors, drivers feel the pain.
That change, too, makes sense, with one addendum proposed by Attorney General Bob McDonnell. It should apply not just to oil companies but to all essential commodities. If Midwest farmers artificially inflate the price of corn after a few tornadoes, then Virginians should be able to ferret out that abuse and punish it.
Genuine price gouging is rare in a civilized society, but when it does occur, Virginia must not ignore it, no matter where it originates.
