UK Watchdog Seeks Power to Combat COVID-19 Price Gouging

Many businesses and individuals have been profiting excess funds by price gouging for products in high demand amidst the panic and confusion of the coronavirus pandemic.

Between March 10 and April 19, the Competition and Markets Authority received over 21,000 complaints regarding notifications of COVID-19 price gouging, according to Financial Times. The average product price increase of these 21,000 coronavirus profiteering complaints is 130 percent; the price increase for hand sanitiser specifically is 367 percent.

There have been attempts worldwide to exploit fears caused by COVID-19.

“The pandemic is dangerous enough without wrongdoers seeking to profit from public panic and this sort of conduct cannot be tolerated,” U.S. Attorney General Barr said.

After finding itself crippled by current laws, the Competition and Markets Authority has pressed the government for political action in taking down companies participating in COVID-19 price gouging during the pandemic. The U.K. competition watchdog has requested “emergency time-limited legislation” from the government to crack down on retailers who are using the virus to profit on items like face masks and hand sanitisers. 

The government has assured that enforcements will be taken as necessary. But opposing lawyers state the CMA is likely incapable of penalising coronavirus profiteering offenders because of consumer laws in the U.K., which do not apply to price gouging. 

CMA chief executive Andrea Coscelli has spoken to the Department for Business, Energy and Industrial Strategy to inform them about necessary provisional new laws.

“Consumer and competition law are not really designed for emergencies,” Coscelli told Financial Times. “Part of our role is to use everything we have but if there are gaps, to explain to the government what those gaps are. Ultimately though, it’s for the government and parliament to decide.”

In March, Prime Minister Boris Johnson said he has contemplated creating new laws that prevent businesses from COVID-19 price gouging, according to Bloomberg.

“I think profiteering is something we should be looking at from a legislative perspective in this house,” Johnson said March 25.

Business secretary Alok Sharma also met with Amazon and eBay to examine price gouging.

However, the ideas on price control laws have been half-hearted, and one government official said it’s “not something we are actively pursuing at the moment.” 

“The CMA deals directly with firms to address any complaints and we continue to keep the issue under review,” a CMA spokesperson said in a statement. 

Chairman Andrew Tyrie of the CMA has requested the BEIS provide a list of consumer-centred controls to try to get the agency to be more consumer-interest friendly.

Nicole Kar, competition partner at Linklaters, said the CMA “urgently” needs new mechanisms and that the U.K. currently has “no legal weaponry” to fight COVID-19 price gouging. Kar noted emergency laws have been passed in order to fight COVID-19 price gouging in the U.S. and France. 

Nelson Jung, partner at Clifford Chance, has said the laws in place to combat coronavirus profiteering are “deficient.”

“These retailers are often small, their behaviour is also not subject to competition rules on abuse of dominance,” he said. “This means that the CMA has to rely on consumer protection legislation which is arguably deficient in this regard.”

The CMA has been in contact with business including large marketplaces like eBay and Amazon, which have both removed price gougers’ accounts and deleted listings that had unfounded price increases. Only a small list of entrusted businesses have been allowed to sell hand sanitisers and face masks on eBay.

Amazon has also “blocked or removed hundreds of thousands of offers and pursued legal action against hundreds of bad actors across a number of countries.”

Have you seen or experienced COVID-19 price gouging at shops you visit? Let us know in the comments.

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