Profiteering is a
pejorative
A pejorative word, phrase, slur, or derogatory term is a word or grammatical form expressing a negative or disrespectful connotation, a low opinion, or a lack of respect toward someone or something. It is also used to express criticism, hosti ...
term for the act of making a
profit
Profit may refer to:
Business and law
* Profit (accounting), the difference between the purchase price and the costs of bringing to market
* Profit (economics), normal profit and economic profit
* Profit (real property), a nonpossessory inter ...
by methods considered
unethical
Ethics is the philosophical study of moral phenomena. Also called moral philosophy, it investigates normative questions about what people ought to do or which behavior is morally right. Its main branches include normative ethics, applied eth ...
.
Overview
Business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...
owners may be accused of profiteering when they
raise prices during an emergency (
especially a war). The term is also applied to businesses that play on
political corruption
Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain. Forms of corruption vary but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, influen ...
to obtain government contracts.
Some types of profiteering are illegal, such as
price fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
syndicates, for example on
fuel subsidies (see ''
British Airways price-fixing allegations''), and other
anti-competitive
Anti-competitive practices are business or government practices that prevent or reduce competition in a market. Antitrust laws ensure businesses do not engage in competitive practices that harm other, usually smaller, businesses or consumers. ...
behaviour. Some are restricted by industry codes of conduct, e.g. aggressive
marketing
Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce.
Marketing is usually conducted by the seller, typically a retailer or ma ...
of products in the
Third World
The term Third World arose during the Cold War to define countries that remained non-aligned with either NATO or the Warsaw Pact. The United States, Canada, Taiwan, Japan, South Korea, the Southern Cone, NATO, Western European countries and oth ...
such as
baby milk
Infant formula, also called baby formula, simply formula (American English), formula milk, baby milk, or infant milk (British English), is a manufactured food designed and marketed for feeding to babies and infants under 12 months of age, ...
(see ''
Nestlé boycott'').
Types of profiteering
*
Price fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
*
Price gouging
Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair by some. This commonly applies to price increases of basic necessities after natural disaste ...
*
War profiteering
A war profiteer is any person or organization that derives unreasonable profit (economics), profit from warfare or by selling weapons and other goods to parties at war. The term typically carries strong negative connotations. General profiteerin ...
Laws
Profiteering is illegal in several countries, including but not limited to:
*UK: Chapter 1 of the
Competition Act 1998
The Competition Act 1998 (c. 41) is the current major source of competition law in the United Kingdom, along with the Enterprise Act 2002. The act provides an updated framework for identifying and dealing with restrictive business practices and a ...
*Germany
§ 291 StGB(Criminal Code) – up to 10 years' jail maximum penalty
*Austria
§ 154 StGB– up to 5 years' jail maximum penalty
See also
*
Enshittification
*
Hoarding (economics)
Hoarding in economics refers to the concept of purchasing and storing a large amount of a particular product, creating scarcity of that product, and ultimately driving the price of that product up. Commonly hoarded products include assets such as ...
*
Business ethics
Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business c ...
*
Price gouging
Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair by some. This commonly applies to price increases of basic necessities after natural disaste ...
*
Product sabotage
*
Rent seeking
Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth.
Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effic ...
*
Supracompetitive pricing
*
Ticket scalping
*
Usury
Usury () is the practice of making loans that are seen as unfairly enriching the lender. The term may be used in a moral sense—condemning taking advantage of others' misfortunes—or in a legal sense, where an interest rate is charged in e ...
Example cases
*
British Airways price-fixing allegations
*
List of price fixing cases
References
Business terms
Profit
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