In 2020, the pneumonia epidemic caused by the novel coronavirus has affected everyone's hearts. Currently, epidemic prevention and control work is being carried out in an orderly manner in various regions, and the people of the whole country have united to take the strictest prevention and control measures. Some illegal operators use the epidemic to drive up prices and seek exorbitant profits. The prices of epidemic prevention supplies and daily necessities in many parts of the country have risen, and price issues have become a social hotspot of widespread public concern. In order to maintain market economic order, various parts of the country have successively introduced guiding opinions on prices, severely and quickly cracking down on all kinds of illegal acts of driving up prices, and local market supervision and management departments have also successively taken measures to strengthen price supervision of epidemic prevention supplies and daily necessities. Taking Yulin City, Guangxi as an example, the Yulin City Market Supervision and Administration Bureau issued a "Price Reminder and Admonition" on February 2, 2020, requiring businesses to price the same kind of goods according to the actual transaction price rate on January 19, 2020, and not to drive up prices. In addition, online shopping platforms including Taobao and Jingdong have also successively issued notices to merchants, prohibiting price increases.

Using the epidemic to drive up prices is different from general price fluctuations. It is a means for market speculators to use their own advantages to seek violent profits.  

There are many reasons for the rise in commodity prices. From an economic point of view, the main reasons are the increase in commodity production costs and the shortage of supply. Taking the rise in pork prices in 2019 as an example, the increase in the cost of dealing with pork caused by swine fever and the shortage of market supply directly led to the continued rise in pork prices, but most of these pork price increases were within a reasonable range, and the state also used administrative means to intervene in pork prices. Therefore, although the price of pork is indeed worrying, it is still not considered price gouging.

During the epidemic prevention and control period, judging from the cases of illegal merchants driving up prices that have been investigated and dealt with in various parts of my country, the behavior of merchants driving up prices mainly has four characteristics:

First, fabricate or spread false information about a sustained and substantial increase in commodity prices, and then increase prices accordingly, prompting people to buy high-priced goods as soon as possible;

Second, the production cost and purchase cost have not changed significantly, and illegal operators have greatly increased prices in order to seek exorbitant profits;

Third, illegal operators take the lead in raising prices without a significant price increase in the region;

Fourth, illegal operators hoard goods, causing prices to rise sharply.

The determination of price gouging is mainly done by comparing the operator's current selling price with the price at a certain time node before, or by comparing the selling price with the purchase price. For example, on February 2, Shandong Province took the lead in issuing a document, A price difference between the purchase and sale of epidemic prevention supplies and daily necessities exceeding 35% can be considered price gouging. For example, the Guizhou Provincial Development and Reform Commission, the Provincial Development and Reform Commission, and the Provincial Market Supervision Bureau jointly issued the "Notice on Issues Related to the Identification of Illegal Acts of Driving Up Prices During the Prevention and Control of Pneumonia Infected by the Novel Coronavirus" on February 4, requiring operators to sell masks, disinfectants, medicines and other commodities related to epidemic prevention and control, as well as daily necessities such as meat and vegetables that are closely related to the daily lives of the people, the price difference between pricing and purchase and sale shall not exceed 35%, otherwise it can be identified as price gouging, and the above five types of commodities shall be based on the sales price of commodities before January 25 as the original price, and the sales price after January 25 shall not exceed the original price, otherwise it will also be identified as price gouging.

On February 5, 2020, General Secretary Xi Jinping chaired the third meeting of the Central Committee for Comprehensive Law-Based Governance of the Country and clearly emphasized that illegal acts of driving up the prices of epidemic prevention supplies and people's livelihood commodities should be severely investigated and dealt with. This also fully shows that, Severely investigating and dealing with price gouging in accordance with the law is one of the key points of coordinating and promoting various epidemic prevention and control work on the track of the rule of law, and it is an important part of ensuring the smooth development of epidemic prevention and control work.

Regarding the legal consequences of price gouging, my country's laws clearly stipulate the administrative responsibilities that need to be borne for price gouging in the "Price Law of the People's Republic of China" and the "Administrative Penalties for Price Illegal Acts", and set a maximum penalty amount of 5 million.

Article 5 of the Administrative Penalties for Price Illegal Acts

If an operator violates the provisions of the Price Law, drives up prices, and promotes an excessive increase in commodity prices, he shall be ordered to make corrections, confiscate illegal gains, and may also be fined less than 5 times the illegal gains; if there are no illegal gains, a warning shall be given, and a fine of not less than 20,000 yuan but not more than 200,000 yuan may also be imposed; if the circumstances are serious, he shall be ordered to suspend business for rectification, or the business license shall be revoked by the administrative department for industry and commerce. If an operator violates the provisions of Article 14 of the Price Law, colludes with each other, manipulates market prices, and causes a relatively large increase in commodity prices, he shall be ordered to make corrections, confiscate illegal gains, and also be fined less than 5 times the illegal gains; if there are no illegal gains, a fine of not less than 100,000 yuan but not more than 1 million yuan shall be imposed, and if the circumstances are more serious, a fine of not less than 1 million yuan but not more than 5 million yuan shall be imposed; if the circumstances are serious, he shall be ordered to suspend business for rectification, or the business license shall be revoked by the administrative department for industry and commerce.

Related cases:

On February 2, 2020, the Qingdao Municipal Market Supervision Bureau inspected Qingdao Yibaocheng Pharmaceutical Chain Co., Ltd. (headquarters) based on multiple complaints and reports. During the epidemic prevention and control period, the party concerned raised a batch of "Good Weather HEPA Anti-Haze Masks" and "Micro-Oxygen Self-Priming Filter Anti-Particulate Respirators" with a purchase price of 45 yuan/piece to 139 yuan/piece, respectively. The purchase-sale price difference rate was 208.89%, It is suspected of constituting an illegal act of raising prices during the epidemic prevention and control period, and the circumstances are relatively serious. On February 3, the Municipal Market Supervision Bureau served the party concerned with an administrative penalty hearing notice, It is proposed to impose an administrative penalty of 2.3 million yuan on it.

On the evening of January 28, 2020, based on a report from the public, the Fuxing District Market Supervision Bureau of Handan City, Hebei Province, filed a case for investigation into the illegal pricing behavior of Handan Yang×Supermarket Co., Ltd. Qianjin Store in accordance with the law. After investigation, The price of cabbage sold by the store on January 26, 2020 was marked as 1.39 yuan/jin, but it was actually sold at a price of 7 yuan/kg when settling the bill, A total of 15 transactions were sold on that day; other vegetables sold by the store also had such behavior. Its behavior violates the "Price Law of the People's Republic of China" and the "Administrative Penalties for Price Illegal Acts", It is proposed to impose an administrative penalty of 500,000 yuan.