Attorney General Pursues Expanded Price Control Powers

Connecticut Attorney General William Tong is proposing an expansion of his office’s authority to impose penalties and regulatory burdens on businesses that adjust product sizes or pricing in response to market conditions and changes in customer preferences.

Tong has endorsed HB 6856, which amends the Connecticut Unfair Trade Practices Act and is currently being considered by the General Law Committee,

The bill’s language allows the Attorney General’s office to declare a newly defined “abnormal economic disruption” that leads to “unconscionably excessive prices” for consumer goods.

Currently, only Connecticut’s Governor or the U.S. President can declare an emergency that triggers existing consumer protections against “excessive prices.”

An emergency declaration would not be required for the Attorney General to declare an “abnormal economic disruption—rather it would be his office’s sole responsibility to determine if these newly defined market conditions exist.

This new “exclusive” authority would also go unchecked by any other government officer or branch, potentially leading businesses to be hesitant to adjust prices to reflect changes in labor rates and mandates, raw material costs, safety regulations, and transportation expenses. 

Price Controls

The Attorney General could extend a self-declared “abnormal economic disruption” indefinitely by simply modifying the order or issuing an extension—allowing the office to control market prices for any good that could be purchased by or on behalf of a state agency.

The bill removes existing price protections for “the fluctuation in the price of items sold at retail which occurs during the normal course of business” from state law.

The bill allows the Attorney General’s office to control market prices for any good that could be purchased by or on behalf of a state agency.

It also removes defined fines in existing law and allows the Attorney General’s office to exclusively enforce any penalties on businesses it unilaterally finds in violation of an ill-defined change in pricing deemed “excessive.” 

Additionally, HB 6856 prohibits vendors from downsizing or reducing the quantity, amount, weight, or size of any consumer product unless the vendor reduces the price charged for the product by a commensurate amount or discloses that the vendor made such downsizing or reduction.

If a vendor fails to reduce their price or indicate on the packaging that a size reduction has taken place in the last 12 months, they can be found liable for an unfair or deceptive trade practice under existing law.

Broad Opposition

Under the bill, the Attorney General will have the authority to investigate complaints of supposed “shrinkflation” on any consumer good, with exclusive authority to enforce violations. 

“If passed, this bill allows the Attorney General, at will, to have control over pricing and packaging size in the marketplace, eliminating a fundamental function of a free market economy,” CBIA’s Chris Davis told committee members at a Feb. 10 public hearing.

CBIA’s Chris Davis said the bill eliminates “a fundamental function of a free market economy.”

The bill drew broad opposition from businesses and trade organizations, including the Connecticut Food Association, Greater New Haven Chamber of Commerce, Connecticut Retail Network, and the Connecticut Energy Marketers Association.

CBIA supports existing state law prohibiting merchants from artificially inflating prices during or after a natural disaster or state of emergency as declared by the Governor or the President of the U.S.

However, there are significant concerns with allowing the Attorney General to decide at will to determine market prices or packaging sizes for consumer goods.

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For more information, contact CBIA’s Chris Davis (860.244.1931).