DC Cracks Down on Price Gougers

After a year long investigation, Michael Giberson (of the excellent Knowledge Problem) points to the DC Attorney General’s announcement that a single retailer has agreed to pay a fine of $897.61 without admitting any wrongdoing.  Yes, 900 bucks.  Unfortunately, the lesson that the DC Attorney General has learned from this year long investigation was not that it was a monumental waste of time and money, but rather, that this warrants an investigation as to whether the gouging occurred at the wholesale level. To beat on an old drum for a moment, the DC investigation is consistent with the comprehensive FTC investigation which found no evidence of “gouging.” In fact, the FTC found evidence that some stations shut down rather than run the risk of liability under gouging statutes (which I criticize at length in this post). As I’ve discussed in this space, proposed and existing state and federal statutes using “unconscionability” standards or fixed and arbitrary limits on retail mark-ups are a very bad idea. As Giberson notes in his post, the most obvious candidate for unconscionability here is the monumental misallocation of the AG’s resources and taxpayer dollars.