Senator Baldwin Leads Bill to Crack Down on Big Corporations Price Gouging Americans
WASHINGTON, D.C. – U.S. Senator Tammy Baldwin (D-WI) and her colleagues introduced the Price Gouging Prevention Act, legislation to crack down on corporate price gouging and protect American families from corporate greed. The bill would create a new federal ban on grossly excessive price increases, and authorize the Federal Trade Commission (FTC) and state attorneys general to enforce the ban.
“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,” said Senator Baldwin. “I am proud to lead this legislation to bring some basic transparency when Americans see rapid price hikes and help stop those at the top of the food chain from exploiting crises to stick families with exorbitant prices.”
During the COVID-19 pandemic, big corporations took advantage of the crisis to prey on consumers – raising prices by even more than necessary to cover increases in their costs, and hiding behind inflation and supply chain disruptions to do it. Now that the market shock of the pandemic has largely abated, corporations’ costs are coming down and profits are rising. But for American families, prices remain high.
The Price Gouging Prevention Act specifically would:
- Prohibit price gouging at the federal level – anytime and anywhere. The proposed bill 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.
- Create an affirmative 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.
- Target dominant companies that have exploited the pandemic to boost profits. The bill 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.
- Require public companies to clearly disclose costs and pricing strategies. During periods of exceptional market shock, the bill requires public companies to transparently disclose and explain changes in their cost of goods sold, gross margins, and pricing strategies in their quarterly SEC filings.
- Provide additional funding to the FTC. The bill appropriates $1 billion in funding to the FTC to carry out its work.
Senator Baldwin has been leading the charge to keep costs down for Americans and hold big companies accountable for price gouging consumers. Earlier this year, she launched an investigation into the extremely high prices four large pharmaceutical companies charge for inhalers and successfully advanced her bipartisan bill to bring basic transparency to drug pricing in the Senate. Last year, Senator Baldwin led on the Big Oil Windfall Profits Tax Act to crack down on profiteering by Big Oil and give working families relief.
Senator Baldwin joined Senators Bob Casey (D-PA), Elizabeth Warren (D-MA), and U.S. Representative Jan Schakowsky (D-IL-9) in leading this legislation, along with co-sponsors Senators Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Ed Markey (D-MA), and Richard Blumenthal (D-CT).
Read more about the Price Gouging Prevention Act here.
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