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Washington senators call for investigation into baby formula price gouging

Senators want to know if retailers are taking advantage of the baby formula shortage.

SEATTLE — As inflation hits people's wallets, price gouging is a term being used to describe some of the products seeing a steep increase in cost. 

Washington Sens. Maria Cantwell and Patty Murray have now called for a Federal Trade Commission investigation into baby formula price gouging. 

In a letter to FTC Chair Lina Khan, the senators allege a major retailer has increased its price for a specialized formula 33 percent between October 2020 and May 2022. 

"It's definitely a confusing time for consumers, as they're seeing prices at levels that they've never seen, or they're seeing some products just not on shelves that they've been used to finding," said Seattle University Professor Mathew Isaac. Isaac studies consumer judgement and decision-making. 

Over the past three years, consumers have seen everything from panic buying, to problems with supply chains and this new phase of high prices. 

Politicians are questioning if we're seeing price gouging, which means sellers are raising prices beyond what's reasonable or fair. 

"It's sometimes hard to tell, you know, whether it is a function of supply and demand," said Isaac. "When you start to see things like baby formula being sold by retailers, or even by individuals for 10x, the price that they were a few months ago, that certainly seems like price gouging." 

Isaac said that there isn't federal legislation protecting consumers from price gouging. States can have their own laws. 

Washington does not have a price-gouging law. Last year Attorney General Bob Ferguson tried to get the Legislature to pass one. The measure failed after opposition from business groups.

When it comes to price gouging the question is whether or not a seller is trying to take advantage of a situation, such as a baby formula shortage. 

Isaac said price gouging is often perceived as "morally reprehensible" and can lead to distrust of a brand.

In the senators' letter to the FTC, they say, “It is utterly unconscionable that anyone would try to take advantage of this shortage to extort scared parents with hungry infants so they can make a quick buck.”

They ask the FTC to work with attorney generals to hold retailers accountable. 

"I can see why, especially for these kinds of products, it's leading people to demand action, immediately from government and from businesses," said Isaac. 

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