In the middle of an affordability crisis, Vanderbilt Policy Accelerator’s (VPA) Brian Shearer continues to explore ways policymakers and law enforcers can take meaningful and rapid action to bring down prices for working families. In a new report, Shearer illustrates that price gouging captive customers in places like airports, stadiums, and hospitals is illegal under existing “unfair acts or practices” statutes. The report also outlines actions that state entities, such as attorneys general and legislatures, can take to crack down on high prices.
“Companies take advantage of captive customers to charge more–sometimes much, much more–than they would in the open market. We should care about this price-gouging because it’s not just happening at entertainment venues like baseball stadiums and concert arenas, but at places like hospitals, prisons, and car dealerships,” said Brian Shearer, director of competition and regulatory policy at VPA. “This is the kind of thing that everyone knows and expects of corporate America in 2025. But it’s illegal, and enforcers and legislators looking for ways to lower costs for families should crack down on these very unpopular price gouging schemes.”
The report outlines how price gouging has spread across the economy, through dramatically overpriced food and beverage options at venues where customers are prohibited from bringing their own items, such as sports stadiums and at airports. Americans also confront overpriced add-ons at car dealerships; wildly inflated health care services such as ambulances and air lift services; “pay-to-pay” payment processing fees for a host of services; and even egregious fees for some government services such as the PACER system used to access documents from the federal judiciary. Prison vendors represent some of the worst offenders when it comes to price gouging consumers, including grossly inflated prices for commissary items and access to basic email and phone services.
The report makes the case that state Attorneys General, federal enforcers, and the plaintiff’s bar should pursue price gouging as an illegal practice under federal and state “unfair acts or practices” statutes, which prohibit business practices that (1) cause substantial injury, (2) that isn’t reasonably avoidable by consumers, and (3) that is not outweighed by countervailing benefits to consumers or competition. The report highlights how overpricing customers when they are captive and have no other choices meets this standard. It also highlights that state and federal regulators can promulgate regulations using this same unfair practices authority to ban price gouging captive customers broadly and that legislatures can add a prescriptive ban on price gouging captive customers to their “unfair and deceptive acts or practices” laws or existing price gouging laws focused on emergency-based gouging.
To read the full report, click here.
About the VPA
The Vanderbilt Policy Accelerator for Political Economy and Regulation (VPA) focuses on cutting-edge topics in political economy and regulation to swiftly bring research, education, and policy proposals from infancy to maturity. To learn more about our work, visit vu.edu/vpa.