Earlier this month, the state Supreme Court, in response to certified questions from a federal court, held that “price gouging” may be an unfair act under the state consumer protection act (CPA, RCW 19.86.020). However, the majority did not “recognize a rigid 15 percent price increase threshold as a predicate to a price gouging claim.”

The underlying case is about price increases during the pandemic. The majority opinion sets the scene:

In November 2020, during the second wave of COVID-19, consumers continued to “panic shop,” which was evidenced by a sea of empty shelves in supermarkets across the nation. In response to retail shortages and to limit exposure to COVID-19, more consumers turned to online shopping. The unprecedented demand on Internet retailers also led to product scarcity online with some retailers out of stock and experiencing shipping problems.

(Citations omitted.)

But artificially capping prices will not alleviate scarcity. The price mechanism allows goods to flow to the people who value them most. Moreover, a higher price signals to businesses that more supply is needed, encouraging more production. (For a good overview of the issue, see this EconTalk episode.) As Justice Gordon McCloud writes in her dissent, “The majority cites no evidence that anti-price-gouging statutes do, in fact, protect the public.”