Tarr: Special law needed to guard against price gouging

BOSTON -- With Massachusetts businesses preparing for the first wave of reopening to begin Monday, price-gouging risks, especially in the area of cleaning supplies, speak to the need for a new law to protect consumers and employers, the top Senate Republican said Wednesday.

Senate Minority Leader Bruce Tarr's bill (S 2652) would expand existing state law banning unfair price hikes on petroleum products to cover any good or service that's needed for public health or safety purposes.

Since March 20, that type of price-gouging has been forbidden under an emergency regulation from Attorney General Maura Healey. Tarr's proposal would enshrine a similar ban in state law permanently, guaranteeing coverage in any future state of emergency.

"To be honest, we have not had a large number of reported instances of this occurring yet," Tarr said during a Joint Committee on Consumer Protection and Professional Licensure virtual hearing Wednesday. "However, one thing we need to do is send a clear message from state government to anyone contemplating this type of activity that it will not be supported in Massachusetts."

Tarr was the only speaker to testify. After his remarks, committee co-chair Sen. Paul Feeney said his panel would tackle the topic "in the coming days."

"I think this is timely," Feeney, a Foxboro Democrat, said. "This is an issue that certainly the Consumer Protection and Professional Licensure Committee has been discussing now for the past couple of months."

Tarr argued that conditions on the ground will change, and possibly not for the better, when the state embarks on its first steps in a phased reopening of businesses forced to close during the crisis.

For the foreseeable future, all employers will need to follow mandatory safety guidelines the Baker administration issued to prevent a rebound in COVID-19 transmission. Employees must wear face coverings or masks, and businesses need to disinfect high-contact surfaces.

The pandemic has already impacted several supply chains, prompting a decline in availability of meat at grocery stores and challenges acquiring PPE for both hospitals and state public health officials.

Tarr said those trends, plus fierce competition for available supplies, could boost the "temptation" for price-gouging once businesses begin seeking protective and cleaning supplies in larger numbers.

"We know (overbidding) is something that's happening now, and it's likely going to intensify particularly because we're about to enter a period of reopening for Massachusetts businesses where many of them will require PPE to open the door," Tarr said. "It's likely some will seize on the opportunity, knowing folks can't reopen without the equipment, to gouge the price."

The bill's language is "subjective" but not "without guidance," as Tarr described it, leaving some room for discretion. Petroleum products would still be covered, and the ban would extend to sale of "goods or services necessary for the health, safety or welfare of the public for an amount that represents an unconscionably high price."

All health- or safety-related goods and services at any point in the supply chain, whether for sale to other businesses or directly to customers, are included.

Gouging would not have a quantified limit. The language defines the practice as creating a "gross disparity" between the current sale price and either the sale price immediately before the state of emergency or the price that other sellers offer.

Businesses that increase prices that can be attributed to higher supplier costs, "abnormal market disruption" or factors such as charging delivery fees would not be deemed to be price-gouging, Tarr said.

The legislation, which Tarr filed in early April, has 14 other cosponsors, including Republicans and Democrats.