Schakowsky, Colleagues Introduce Bicameral Bill to Stifle Corporate Price Gouging

WASHINGTON — Today, House Energy and Commerce Subcommittee on Consumer Protection and Commerce Chairwoman Jan Schakowsky (D-IL), alongside Judiciary Committee Chairman Jerrold Nadler (D-NY), Judiciary Subcommittee on Antitrust, Commercial and Administrative Law Chairman David Cicilline (D-RI), Representatives Val Demings (D-FL), and Katie Porter (D-CA), introduced the Price Gouging Prevention Act of 2022, which would prohibit the practice of price gouging during all abnormal market disruptions – including the current pandemic – by authorizing the Federal Trade Commission (FTC) and state attorneys general to enforce a federal ban against unconscionably excessive price increases, regardless of a seller's position in a supply chain. This legislation also strengthens and expands requirements for public companies to disclose their pricing strategies in their filings with the Securities and Exchange Commission (SEC) and grants new funding to the FTC. A recent study by the Economic Policy Institute concluded that fatter corporate profit margins have driven more than half of prices increases since 2020. Senators Elizabeth Warren (D-MA) and Tammy Baldwin (D-WI) introduced the Price Gouging Prevention Act of 2022 in the Senate.

In the House, the legislation is cosponsored by Representatives Jamal Bowman (D-NY), Ro Khanna (D-CA), and Bobby L. Rush (D-IL). In the Senate, the legislation is cosponsored by Senators Bob Casey (D-PA), Sheldon Whitehouse (D-RI), Bernie Sanders (I-VT), Ed Markey (D-MA), Jeff Merkley (D-OR), Tammy Duckworth (D-IL), and Dianne Feinstein (D-CA).

"Price gouging harms consumers and is fueling the inflation hitting Americans' pocketbooks. Corporate profit margins reached a 70-year high in 2021. Just this year, Big Pharma has increased the prices of 742 drugs. And prices at the pump remain high despite the cost of oil coming down. That's corporate greed," said Chairwoman Schakowsky. "During World War II, war profiteers were held accountable. The same rule should apply here. Our bill empowers the FTC to hold these price gouging companies accountable when they take advantage of American consumers, especially during times of global uncertainty."

"Unchecked corporate greed has gone on for far too long, and mega corporations are profiteering at the expense of working families during this time of crisis," said Chairman Nadler. "The Price Gouging Prevention Act of 2022 is an important step toward holding corporations accountable for their price gouging and profiteering at the expense of hardworking Americans. I applaud Congresswoman Schakowsky for her leadership on this issue."

"As Americans are working to recover from two years of an unprecedented health crisis and the economic downturn it caused, companies are reporting record profits as worker pay remains stagnant and families feel squeezed," said Chairman Cicilline. "This is being driven by corporate greed. We need to stop this now and prevent this egregious behavior from ever happening again in the future."

"As the daughter of a maid and a janitor, my family valued every dollar. We are sick and tired of seeing a split screen of skyrocketing prices alongside skyrocketing corporate profits. It's simply unfair to force working families to tighten their belts while America's CEOs and corporate shareholders are thriving at our expense. There's no excuse for using national emergencies to price gouge hardworking families," said Rep. Demings. "This bill is a targeted and strategic measure to hold the biggest companies in the world accountable for bad behavior while protecting small businesses and our communities. I thank Congresswoman Schakowsky for her leadership and call on our House and Senate colleagues to join us and stand with working Americans, not corporate donors."

"Corporations are taking advantage of uncertain times and raising prices because they can," said Rep. Porter. "While CEOs brag about sky-high profits on earnings calls, families are struggling to put food on the table and fuel in their cars. Congress needs to crack down on corporations that are using inflation as a smokescreen to price gouge families. I'm proud to back this legislation that would better protect families from corporate profiteering."

The COVID-19 pandemic has only exacerbated the nation's inequities. Americans should not be forced to fork over more money just because corporations are being greedy. Throughout the public-health crisis, companies, for the most part, have worked diligently to keep their prices as low as possible, but some corporations are using this crisis to prey on hardworking people by unnecessarily raising their prices.

Last month, Congresswoman Schakowsky slammed Big Oil executives for the higher prices at the gas pump. In March, Congresswoman Schakowsky called out drug manufacturers for squeezing American families with rapid and widespread price hikes on prescription drugs. Corporations are raking in record profits, meanwhile the most vulnerable Americans are struggling to put food on the table.

The Price Gouging Prevention Act specifically would:

• Prohibit price gouging at the federal level. The proposed bill would allow the FTC and state attorneys general to enforce a new standard against sellers charging an unconscionably excessive price during periods of exceptional market shock. The bill clarifies that price gouging is illegal wherever it occurs in a supply chain or distribution network.
• Create an affirmative defense for small businesses acting in good faith. Local businesses often must raise prices during crisis events because they have little negotiating power with their price-gouging suppliers. This affirmative defense protects small businesses earning less than $100 million from frivolous 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.

"Prices are rising, and consumers are paying more, while giant corporations are using inflation as a cover to expand their profits," said Senator Warren. "This bill would crack down on corporate price gouging by setting tougher rules of the road and enhancing enforcement, and I'm going to fight to get this done."

"We can lower costs for families across Wisconsin if we take on big corporations who are using a crisis to jack up prices for consumers," said Senator Tammy Baldwin. "During COVID, Big Oil and those at the top of the food chain have used inflation to boost record profits while working families have paid the price. This legislation will shine a light on price hikes and help prevent big corporations from exploiting a period of inflation to gouge consumers with higher costs."

This legislation is endorsed by: The Hub Project, Groundwork Collective, American Economic Liberties Project, Open Markets Institute, Economic Security Project, Consumer Federation of America, National Consumer Law Center (on behalf of its low-income clients), and Public Citizen.

Congresswoman Schakowsky has fought her entire career on behalf of consumers and there is still more work to be done. She is working tirelessly to crack down on corporate profiteering to bring down costs for everyday Americans:

• Earlier this year, Congresswoman Schakowskychaired a Consumer Protection and Commerce subcommittee hearing on price gouging. She juxtaposed the record high profits of corporations and the diminishing wages of workers.
• Last May, at an Energy and Commerce Health subcommittee hearing entitled, "Negotiating a Better Deal: Legislation to Lower the Cost of Prescription Drugs" – Congresswoman Schakowsky called out big pharma's greed and price gouging practices, and the effect they have on seniors who have to go without their medications because they cannot afford them.
• In an op-ed published in The Hill on December 2, 2020, Congresswoman Schakowsky demanded the government take action because prescription drug prices are killing Americans.
• In the early days of the COVID-19 pandemic, Congresswoman Schakowsky, along with other Democratic members of the Illinois delegation, urged Illinois' leading health insurers to provide financial relief to Illinois individuals, families, and small businesses during the pandemic.

Bill Text (pdf) | One Pager (pdf)

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