Industries line up to tear down proposal to rein in price-fixing
"This bill does not cap in any kind of way how much someone can charge for something as long as they aren't knowingly, fraudulently or deceptively engaging in conduct" said the bill's sponsor, Democratic Attorney General Aaron Ford.
Democratic Attorney General Aaron Ford this week said his proposed legislation to crack down on 'knowingly deceptive' price fixing would bolster consumer protections and that opposition from industry groups are relying on 'a bit of hyperbole' to attack it.
'If you're not being deceptive, if you're not being fraudulent, this bill would not apply to you,' Ford said. 'If you are using deceptive and fraudulent means to manipulate the price of necessities beyond those basic forces of supply and demand, this bill speaks directly to your activities.'
Assembly Bill 44, heard Wednesday at the Assembly Committee on Commerce and Labor, expands the state's existing Unfair Trade Practice Act to include knowingly deceptive price fixing of essential goods and services.
The bill defines essential goods as those 'needed on a daily or recurring basis for the livelihood of a person,' including 'food, medicine and shelter.'
An amendment proposed prior to the hearing tweaked the definition to include 'food purchased for off-premises consumption, clothing and footwear, gasoline and other energy goods, pharmaceutical and other medical products, housing, household utilities, ground transportation, telecommunication services, and internet access.'
Ford told state lawmakers he was working on an additional amendment but didn't offer details of what it would include.
He said the efforts to crack down on price fixing came from concerns about the increased cost of housing.
Landlords and property owners have come under fire in recent years for using rent-fixing software to artificially raise the price of rents.
Real estate software companies, like RealPage, have been sued by several state attorneys general and the federal government in the last year. RealPage has denied wrongdoing in these cases. Nevada has not taken action against RealPage.
'We learned of rental prices being increased by virtue of some unfair and illegal price fixing tactics,' Ford said. 'We learned about that through not only complaints from our constituents but also from other attorneys general who are prosecuting agencies and entities that are engaging in that in their practice.'
The cost of living, the state's 'consistently high unemployment rate' and the potential of cuts to the federal social safety net programs such as Medicaid being considered by congressional Republicans are putting 'both the health and financial livelihoods of so many Nevadans at risk,' Ford said.
During times of financial stress, he added, it's easy for people to be exploited through deceptive practices including price fixing.
While the state does have a mechanism to go after some industries that engage in price fixing under the Nevada Unfair Trade Practice Act, he said the office was seeking more specific language to give them additional tools.
'This bill would fill current holes in statutes that have proven insufficient to stop these practices from occurring,' Ford said.
Multiple times during the hearing, Ford reiterated the bill wouldn't apply to businesses that have to increase prices because of inflation, supply chain disruptions or operational costs.
Still, many concerns around the bill stemmed from how the legislation would affect small businesses.
Republican Assemblymember Melissa Hardy, a former small business owner, questioned how the bill would affect businesses that have to raise prices 'because our rent went way up, or our products increased substantially.'
Ford said the scenario described was a basic instance of supply and demand.
'The threshold question for this bill is whether there has been knowingly fraudulent activity,' he said.
Ford used the example of a small business owner raising prices because the commercial space they occupy raised the rent. If the property owner colluded with other landlords or price-fixing algorithms to raise the rent for the small business owner, Ford said, the landlord 'might fall within the bill' but 'raising your prices because of your rent increase would not.'
The Vegas Chamber, Retail Association of Nevada, T-Mobile, AT&T, Nevada Realtors and the Nevada State Apartment Association were among the many industry groups opposed to the bill.
They labeled the legislation as overly broad, 'government price control' and government 'overreach.' One went as far as saying efforts to prevent deceptive price fixing would 'impose rent control.'
'The manipulation of price prevention, while it mentions fraudulent or deceptive conduct, will make normal, everyday market activities legally suspect,' said Miranda Hoover, a lobbyist with the Energy & Convenience Association of Nevada. The bill would mean 'raising prices for any reason could bring legal action and result in liability.'
Ford called their statements hyperbolic.
'We are talking about engaging in knowingly and deceptive conduct,' he said. 'That's the threshold. We don't get to the question about how much the price has increased … This bill does not cap in any kind of way how much someone can charge for something as long as they aren't knowingly, fraudulently or deceptively engaging in conduct. You can charge what you want to charge.'
He reminded lawmakers that some of the same groups against his bill also opposed efforts to restrict price gouging during a state of emergency.
AB 44 also includes price fixing by utilities, but the legislation exempts utilities that are already regulated by the Public Utilities Commission of Nevada. Several Democratic lawmakers questioned the strength of the provision and whether all the state's utilities would essentially be exempt under this provision.
'I can't think of any that are not already regulated,' Democratic Assemblymember Elaine Marzola said.
Ford said telecommunications providers, like AT&T and T-Mobile, were deregulated in the state. It is 'not beyond the pale of imagination that an entity that right now is regulated may no longer be regulated,' he added.
The Nevada Coalition of Legal Service Providers was the lone organization to testify in support of the bill.
'This is about scammers trying to fleece Nevadans,' said Jonathan Norman, the coalition's advocacy, outreach and policy director. 'When I think of the consumers we see, the people coming into our offices, they almost uniformly, no matter the issue, had economic harm happen to them. We appreciate any bill that stands up for those consumers'
The committee took no action on the bill.
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