This article appears in the December 2025 issue of The American Prospect magazine. Subscribe here.
We’ve all been there. You’re in a stadium or an airport or a movie theater, and you head to the concession stand. You know that you’ll pay through the nose—$9.47 for a water and a little bag of hard pretzels, $22.89 for a large popcorn bucket, $28 for a beer. The choices are simple: Don’t buy or get gouged.
Captive pricing is spreading into more of our everyday transactions. Businesses without competition can easily take advantage of customers. But a new report from the Vanderbilt Policy Accelerator suggests that we should not be resigned to shelling out big bucks when there are no alternatives.
The federal government, states, and even private litigants can attack captive pricing, argues Brian Shearer, a former top official at the Consumer Financial Protection Bureau. Multiple federal agencies can use prohibitions on unfair or deceptive acts and practices (UDAP) for this purpose. And while the Trump administration has obliterated consumer protection, most states have their own UDAP statutes, which can apply to situations where consumers are given no choice but unfair prices.
“Just because it is something that we are all aware of and resigned to and hate doesn’t make it legal,” says Shearer. “I would argue that that’s a more egregious form of unfair practice. You’re not being stabbed in the back, you’re being stabbed in the front.”
This kind of pricing is popping up across the economy because it’s lucrative. When you move from the airport to the airplane, you are gouged if you want Wi-Fi or a better seat or a checked bag; the rent-seeking is cumulative. Auto dealerships upsell overpriced extras like dubious security systems or “guaranteed asset protection” insurance, grinding down customers until they assent. Ambulances, airlift services, and anesthesia are often defined as “out-of-network” options in health care that extort from patients in an emergency; many of these businesses have been taken over by private equity firms. Paying rent through a website or app now often comes with unavoidable “processing” or “convenience” fees. And literally captive customers in our nation’s prisons endure outrageous costs for basic necessities in the commissary and phone calls to loved ones; incarcerated people are the only Americans who must buy a stamp to send email.
“One reason prices are so high is because customers are captive,” Shearer says. “That is not a free and fair market.”
Policymakers have tried to deal with this. “Street pricing” rules at a lot of airports limit prices to no more than 18 percent above the price outside the airport. But that can be tough to enforce without constant monitoring and isn’t applicable in other contexts. (There’s no “street price” of anesthesia.)
Shearer’s solution is the unfair practice statute, originated in the FTC Act in 1914 and adopted by states in the 1960s and ’70s. He envisions a three-pronged approach: State attorneys general or consumer protection agencies could enforce UDAP on a case-by-case basis. Enforcers could also write specific regulations about stadium or hospital pricing, and state legislators could also pen laws with prescriptive prohibitions for captive venues.
This belt-and-suspenders approach has a better chance of working. “Sometimes companies wait for enforcement to come to them, the deterrent effect is not effective,” Shearer says. “Passing a new rule or law has a better impact on the broader group of companies that aren’t getting sued.”
Most state UDAP laws allow for a private right of action. No individual is going to sue over a $20 beer at the Oasis concert that should have been $8, but class action lawsuits can fight unfair pricing. Normally, arbitration agreements and class certification difficulties are hindrances to this type of private enforcement. But with captive pricing, arbitration may not apply: The consumer has a contract with the airline, and the airport is just capitalizing on captivity, for example. And class members are similarly situated, because the unfair prices are publicly posted and everyone pays them.
After an off-year election that largely turned on affordability, policymakers should flock to take on captive pricing, Shearer says. “State attorneys general that want to do something about cost of living and corporate corruption can do something visible that makes people feel like they’re addressing the thing in their daily lives.”
This article appears in Dec 2025 Issue.