A case for price gouging policy versus price control
Prosecuting price gouging using competition policy comes with constraints
To most readers the Competition Commission is a distant institution that deals with big bad corporations, either when they seek to merge or when they have agreed to fix prices. This image has been shattered in recent months. Since March the commission has apparently focused on complaints against small businesses, prosecuting individual pharmacies and distributors for charging “excessive” prices for hand sanitiser and face masks. The commission appears to have turned into the Covid-19 price police.
The consumer often welcomes — even demands — prosecution of disaster-related price gouging. Prices of food and medical supplies sometimes surge after hurricanes and earthquakes; natural disasters may lead to sharp increases in prices as supply chains are disrupted and panic buying ensues. The onset of the Covid-19 pandemic raised a similar concern, within government and among consumers, that sharp price increases for food, cleaning products and face masks were on the cards...