Rep. Demings Cosponsors New Legislation to Ban Price Gouging

Orlando, FL: Today, Rep. Val Demings (FL-10) joined Rep. Schakowsky and other Members of Congress in the House and Senate on the Price Gouging Prevention Act of 2022, which would prohibit the practice of price gouging during all abnormal market disruptions - including the current pandemic. A recent study by the Economic Policy Institute concluded that fatter corporate profit margins have driven more than halfof prices increases since 2020. Bill Text (pdf)| One Pager (pdf)

Said Rep. Demings, "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. 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."

"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."

"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."

Background

Rep. Demings has been a leader in Congress on the gas price issue during Putin's war. She is leading legislationto crack down on corporate price gouging in the oil and gas sector. Additionally, Rep. Demings previously led callsfor the Administration to "exercise all options available to bring down the cost of gasoline now," specifically calling for a release from the Strategic Petroleum Reserve, opposing false scarcityfrom OPEC+ producers, ending excessive U.S. gasoline exports, cracking down on illegal price manipulationsin the oil and gas market, and fining producersfor deliberately not using existing drilling sites.

The Price Gouging Prevention Act of 2022 is being led in the House by Energy and Commerce Subcommittee on Consumer Protection and Commerce Chair Jan Schakowsky (D-IL). The Senate leads are Senate Subcommittee on Fiscal Responsibility and Economic Growth Chairwoman Elizabeth Warren (D-MA), and Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Chairwoman Tammy Baldwin (D-WI).

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.

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.

In the House, the legislation is cosponsored by Representatives Val Demings (D-FL), Jerrold Nadler (D-NY), David Cicilline (D-RI), Katie Porter (D-CA), 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).

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