South African competition policy on excessive pricing and its relation to price gouging during the COVID‐19 disaster period

Abstract

The declaration of a state of national disaster in South Africa, due to the COVID‐19 pandemic, was followed by excessive‐pricing regulations pertaining to certain consumer and medical products and services. The regulations and their application suggest an intertemporal benchmark to judge excessive pricing, deviating from previous practice. Intertemporal comparisons assume a structural shift during COVID‐19 that changes competitive conditions, related to changes in consumer behaviour. Such comparisons must also account for demand and cost changes. While the COVID‐19 regulations allow for cost‐based price increases, demand‐based increases are not explicitly accounted for, suggesting that the regulations are framed more generally as price‐gouging regulations. The differences between price‐gouging and excessive‐pricing benchmarks depends on the type of disaster‐period demand shock. They are similar following a transitory demand spike, provided sufficient time is allowed for dynamic price behaviour, but differ markedly when demand is elevated for the duration of the disaster period. Applying simple cost‐based comparisons in recently concluded cases against smaller retailers are consistent with excessive pricing, given the presence of a demand spike. To the extent that these involve persistently higher demand, cases against wholesalers and larger retailers will be more complicated, as such demand must be reflected in competitive prices.

Consumer Complaints Regarding Overpricing in the Covid-19 Period and Measures Taken in Terms of Competition Law

“…Most of the studies include the regulations, practices and examples of the countries' own competition authorities. (Kigwiru, 2020;Mncube, 2020;Oxenham, 2020;Ratshisusu & Mncube, 2020;Yavuz, 2020;Boshoff, 2021). Other studies, give examples of the regulations within the scope of competition law decisions brought by the EU and OECD member countries during the COVID-19 period and the excessive price practices seen in EU countries.…”

“…Fahiş fiyat uygulamaları ve bu konuda gerçekleştirilen yasal düzenlemeleri konu alan çalışmalar çok kısıtlıdır. Yapılan çalışmaların çoğu ülkelerin kendi rekabet otoritelerinin konuyla ilgili düzenlemelerini, uygulamalarını ve örneklerini içermektedir (Kigwiru, 2020;Mncube, 2020;Oxenham, 2020;Ratshisusu & Mncube, 2020;Yavuz, 2020;Boshoff, 2021). Diğer çalışmalar ise, AB ve OECD üye ülkelerinin COVID-19 döneminde getirdiği rekabet hukuku kararları kapsamındaki düzenlemelerden ve AB ülkelerinde görülen fahiş fiyat uygulamalarından örnekler vermektedir (Costa-Cabral vd., 2020;Sproul & Harms, 2020;Giosa, 2020;Rooney vd., 2020;OECD, 2020).…”

Possible Causes of Excessive Increase in Food Prices and the Impact of Covid-19

“…İkinci neden küresel iklim değişikliği ve doğal afetlerin etkisidir ( Samuels ve Puro, 1991;Pelling vd., 2002;Neumayer ve Barthel, 2011;Singh-Peterson ve Lawrence, 2015;Zhou vd., 2018;Yu vd., 2018;Boshoff, 2020). Küresel ısınma zamansız iklim değişiklerine neden olmakta ve ekonomiler üzerinde negatif etkiler doğurmaktadır (Pelling vd., 2002;Singh-Peterson, ve Lawrence, 2015;Boshoff, 2021), zamansız don olayları ve aşırı soğuklar (Prentice vd., 2020), seller ve kuraklık (Harrison vd., 2010;Quiggin, 2007), fırtına-kasırga-tayfun (Harrison vd., 2010;Kalkuhl vd., 2016;Sakai vd., 2017), yangın, deprem ve tsunami (Cavallo, Cavallo ve Rigobon, 2014;Watanabe, 2020) tarımsal ürünlere ciddi zararlar vermekte, rekolteyi düşürmekte ve arzın azalmasına neden olmaktadır. Diğer taraftan iklim değişikliğinin sebep olduğu bir dizi küresel ve yerel etki, son yıllarda gıda üretiminin girdi maliyetlerini ve çıktı fiyatlarını etkileyerek gıda fiyatlarının artmasına yol açmaktadır (Edwards vd., 2011).…”

How price-gouging regulation undermined COVID-19 mitigation: county-level evidence of unintended consequences

“…The new cost we identify will be relevant for the vigorous policy debate surrounding the impacts of price-gouging laws (e.g., Brewer, 2007 ; Culpepper & Block, 2008 ; Fleck, 2014 ; Montgomery et al, 2007 ; Niles, 2020 ; Pan, 2020 ; Snyder, 2009 ; Zwolinski, 2008 ). The discovery of this new cost of price-gouging regulation during pandemics adds to the emerging but still scarce literature on price-gouging specific to the COVID-19 pandemic (e.g., Boshoff, 2021 ; Cabral & Xu, 2020 ; Chakraborti & Roberts, 2020 , 2021a ).…”