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SACRAMENTO March 27, 2020 – California Attorney General Xavier Becerra today issued the following statement reminding businesses that California’s law prohibiting price gouging during a time of emergency applies to all sellers, including retailers, wholesalers, and manufacturers. This means that California’s price gouging law applies to transactions between manufacturers, wholesalers, distributors, and retailers as it does between retailers and consumers.
“During this difficult public health emergency, it’s imperative that we stop price gouging anywhere in the supply chain,” said Attorney General Becerra. “The Department of Justice has zero tolerance for price gouging against Californians — or our hospitals, medical providers or first responders. To all Californians, our ask is simple: if you see something, say something. Report price gouging – by a retailer, wholesaler, distributor or manufacturer – to my office by filing a complaint at http://oag.ca.gov/report.”
Under California Penal Code Section 396, price gouging is a misdemeanor in all California communities during a declared state of emergency. California law generally prohibits charging a price that exceeds, by more than 10 percent, the price of an item before a state or local declaration of emergency. This law applies to the prices of certain goods or services when a declared state of emergency results in disruptions of the market, including with respect to food, emergency and medical supplies, and other consumer goods. Exceptions to this prohibition exist if, for example, the price of labor, goods, or materials has increased for the business. The statute applies equally to all sellers, including retailers, wholesalers, distributors, or manufacturers, and includes sales to businesses and government agencies.
Violators of the price gouging statute are subject to criminal prosecution that can result in a one-year imprisonment in county jail and/or a fine of up to $10,000. Violators are also subject to civil enforcement actions including civil penalties of up to $2,500 per violation, injunctive relief, and mandatory restitution. The Attorney General and local district attorneys can enforce the statute.
For the latest on coronavirus preparedness, information, and response, please visit the websites of the California Department of Public Health, Office of Governor Gavin Newsom, and Office of Emergency Services. If you are a worker or employer who has been affected by COVID-19, you can find guidance and resources on the California Labor and Workforce Development Agency’s website.