No action from Pritzker’s COVID-19 price gouging pursuit
SPRINGFIELD, Ill. (AP) — The coronavirus pandemic had steamrolled Illinois, and amid the helter-skelter of counting hospital beds, keeping pace with ever-changing federal health guidance and maneuvering a market-turned-minefield of protective-gear prices, Gov. J.B. Pritzker made a pledge.
“Price gouging will not be tolerated,” the Democrat declared in March, later promising that instances of unfair pricing would be brought to the attention of Attorney General Kwame Raoul.
During the chaotic spring, Illinois, like most states, was forced to pay sometimes eye-popping markups for lifesaving gear: $6 face masks previously costing $1 or less; ventilators listing for $25,000 selling for $40,000 or more.
Through Aug. 23 the state’s total outlay is $1.2 billion. But Pritzker has flagged no instances of price gouging. An Associated Press public records request disclosed one complaint, submitted by a consumer, forwarded to the attorney general.
Meanwhile, angry shoppers were pummeling Raoul’s consumer protection division with 1,800 price complaints on everything from toilet tissue to whiskey. As for how they’ve been handled and whether they’re resolved, officials say they’ve been unable to compile statistics because the pandemic has forced staff to work remotely. When asked for information about any price-gouging court action which Raoul’s attorneys have initiated, Raoul spokeswoman Annie Thompson did not respond.
That perplexes experts in antitrust law, which encompasses price gouging.
“Where the state is spending a lot of money, I would expect that there would be specific instances in which there would be a serious complaint or concern or an episode that would warrant more detailed examination,” said Bill Kovacic, a George Washington University Law School professor and former Federal Trade Commission chairman.
Before the pandemic, Illinois law prohibited only petroleum product price gouging. Asked for the new language, a spokeswoman for Pritzker’s COVID-19 response pointed to the governor’s March 9 disaster declaration, which prohibits “increases in the selling price of goods or services.” Nikhil Mehta, whose work for the Chicago law firm SmithAmundsen includes antitrust action, said the rule doesn’t nix all increases. It piggybacks on the existing motor-fuel rules, which bar “unconscionably high” prices.
Other states have touted their action. King & Spalding, a multinational law firm with a Chicago office, reported in late spring on litigation by the federal government and in at least nine states, covering private as well as government action, such as lawsuits by Minnesota-based 3M and the nonprofit advocacy group Alliance for a Better Utah. As early as March 26, the Texas attorney general filed a lawsuit against an online auction of high-demand N95 masks for $11 a pop.
For Pritzker, speedy procurement was paramount, spokeswoman Jordan Abudayyeh said — holding out for pre-pandemic prices would have been disastrous. But when it was pointed out that’s not what Pritzker promised and there’s no prohibition on post-purchase investigations, Abudayyeh then said that when the ordeal ends, the administration will act on “instances of price gouging that warrant our referral to authorities.”
Chicago’s office of Business Affairs and Consumer Protection reported 747 complaints of price gouging compared to two in 2019. Investigations uncovered few instances of unreasonable price hikes, spokesman Isaac Reichman said. But the office issued four citations for price gouging, ongoing cases that could result in fines, he said.
Shortly after Pritzker’s executive order, Raoul promised to “ put people before profits.” More than 1,100 complaints flew in during the first three weeks. But Raoul spokeswoman Thompson said the Democrat, who regularly issues news releases documenting his activities, has not decided whether he will publicly release outcomes.
According to copies of about 200 complaints the attorney general disclosed in response to an AP records request, complaints were varied: A Chicago corner grocer selling arrachera for $9 a pound when it’s usually $4. Lysol online for $9.99 — plus $12.99 shipping.
“I need to feed my children,” one store owner says when asked why disinfectant spray cost $25. Toilet tissue from multi-roll packets is wrapped individually for $5.49 each.
So quickly did they come in that Susan Ellis, chief of consumer protection, said her staff conducted “triage” on the “more egregious ones.” Ultimately, many were resolved informally, Ellis said. Lowered prices often result from contact from the state’s top law enforcer and his authority to assess $50,000 fines.
Mehta, the Chicago lawyer, said unfamiliarity with a new area of enforcement and pandemic-shuttered courts might have hampered the office. But he noted that the attorney general can seek emergency court action on serious consumer issues and finds it surprising “if there hasn’t been a single case filed.”
“I would have expected to have seen an injunction here or there,” Mehta said. “But if they’re getting people to comply, based on direct communication outside of the court, then it sounds like it’s been effective.”
Michael Volkov, whose Washington, D.C.-based law firm’s specialties include corporate compliance, said he expected more aggressive gouger pursuit by all levels of government. But he noted the late summer resurgence of the illness affecting dozens of states and said another economic shakeup — and attempts to exploit it — could follow.
“It seems like the supply chains have gotten pretty much straightened out and you go to the grocery store and pretty much everything’s there,” Volkov said. “But that’s not to say that something couldn’t happen.”
Associated Press researcher Randy Herschaft in New York contributed.
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This story has been corrected to show the name of the Chicago law firm whose work includes antitrust action is spelled SmithAmundsen, not SmithAmundson.