A group of Democrats in Congress recently introduced legislation that seeks to protect consumers from price gouging.
The Price Gouging Prevention Act of 2024 would authorize the Federal Trade Commission (FTC) and state attorneys general to enforce a federal ban against grossly excessive price increases, or price gouging.
“Giant corporations are squeezing American families for fatter profits. It’s time to give the Biden administration stronger tools. Senate Democrats and I are renewing our push for a new law to crack down on corporate price gouging,” U.S. Sen. Elizabeth Warren (D-MA), one of the bill’s sponsors, said.
The bill was also introduced by Sens. Tammy Baldwin (D-WI) and Bob Casey (D-PA) and Rep. Jan Schakowsky (D-IL).
“Big corporations are price gouging Americans, taking in record profits, and giving their executives lavish bonuses, all while Wisconsin families struggle to get by. It’s wrong and we need to do more to hold these big corporations accountable and give Wisconsinites some breathing room,” Baldwin said.
Specifically, this legislation would clarify that price gouging is an unfair and deceptive practice under the FTC Act. It would allow the FTC and state attorneys general to stop sellers from charging a grossly excessive price, regardless of where the price gouging occurs in a supply chain or distribution network. It would provide $1 billion in additional funding to the FTC to carry out its work.
Further, it would create a defense for small businesses acting in good faith. Small and local businesses sometimes must raise prices in response to crisis-driven increases in their costs because they have little negotiating power with their price-gouging suppliers. This affirmative defense protects small businesses earning less than $100 million from unjustified litigation if they show legitimate cost increases.
“Corporations are raising the prices of everyday household items to rake in record profits at the expense of Pennsylvania families,” Casey said. “Our bill will crack down on greedflation by finally prohibiting price gouging and holding corporations accountable for raising costs excessively.”
In addition, it would create a rebuttable presumption of price gouging against firms that exercise unfair leverage and companies that brag about increasing prices during periods of inflation. Also, it would require public companies to clearly disclose costs and pricing strategies, including during periods of exceptional market shock.
“As large grocery chains continue to rake in record profits, there are many families struggling to put food on the table. The cost of basic groceries has jumped by 25% over the past four years. Price gouging is harming consumers and is fueling the elevated profit margins among greedy corporations,” Schakowsky said.
The legislation is co-sponsored in the senate by Sens. Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Ed Markey (D-MA), and Richard Blumenthal (D-CT). In the House it is co-sponsored by Rep. Eleanor Holmes Norton (D-DC), Hank Johnson (D-GA), Ro Khanna (D-CA), Jerry Nadler (D-NY), Mary Gay Scanlon (D-PA), Paul Tonko (D-NY) and Katie Porter (D-CA)
It is endorsed by the American Economic Liberties Project, Consumer Federation of America, Groundwork Collaborative, Unrig Our Economy, Economic Security Project Action, Public Citizen, Farm Action Fund, National Consumer Law Center, and Accountable.us.