February 15, 2024

Warren, Baldwin, Casey, Schakowsky Reintroduce Legislation to Crack Down on Price Gouging by Giant Corporations

Bill Text (pdf) - Text of One Pager (pdf) 

Washington, D.C. – Today, United States Senators Elizabeth Warren (D-Mass.), Tammy Baldwin (D-Wisc.), and Bob Casey (D-Pa.) and Rep. Jan Schakowsky (D-Ill.) reintroduced the Price Gouging Prevention Act of 2024, which would protect consumers and prohibit corporate price gouging. The bill would authorize the Federal Trade Commission (FTC) and state attorneys general to enforce a federal ban against grossly excessive price increases, regardless of a seller’s position in a supply chain. 

Specifically, this legislation would crack down on major companies that brag about exploiting American consumers or exercise unfair leverage while jacking up prices. It would also protect small businesses that raise prices in good faith. Additionally, the bill would ensure that when there are major shocks to the market, public companies disclose changes in their pricing strategies in their filings with the Securities and Exchange Commission (SEC).  

“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,” said Senator Warren.

“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.”

“Corporations are raising the prices of everyday household items to rake in record profits at the expense of Pennsylvania families,” said Senator Casey. “Our bill will crack down on greedflation by finally prohibiting price gouging and holding corporations accountable for raising costs excessively. It is long past time we take on big corporations and lower costs for families.”

“Long after the end of the COVID emergency, CEOs in certain industries keep hiking prices faster than their costs increase. They’re hauling in huge profits at the expense of the hardworking families who are getting squeezed,” said Senator Whitehouse. “Our legislation would help rein in price gouging by Big Oil and other corporate bad actors while lowering costs for families across America.”

“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. We live in the richest country in the world at the richest moment in history. Yet, many Americans are unable to feel the full magnitude of our wealth,” said Congresswoman Jan Schakowsky. “Our bill empowers the FTC to hold these price gouging companies accountable when they take advantage of American consumers. People must always come before profits.”

“Across our country, large corporations are squeezing Americans’ budgets with outrageous prices on everyday necessities, regardless of whether their costs are increasing. I’m proud to join my colleagues in introducing the Price Gouging Prevention Act to defend consumers against corporations’ predatory price rises and end this exploitation,” said Congressman Jerrold Nadler

“Congress needs to protect consumers from price-gouging corporations that are out to boost greedy CEO salaries and profits,” said Congressman Hank Johnson. “I’m proud to join Senators Elizabeth Warren (D-Mass.), Tammy Baldwin (D-Wisc.), and Rep. Jan Schakowsky (D-Ill.) and other colleagues to put people over politics and obscene corporate profits.”

During the COVID-19 pandemic, big corporations took advantage of the crisis to prey on consumers by “price gouging”: 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 hardworking Americans, prices remain high. The culprit? Corporate price gouging. Prices for consumers have risen by 3.4 percent over the past year, but producers’ input costs have risen only 1 percent. Take diapers: prices for wood pulp, the main input for diapers, declined by 25 percent last year, yet parents are still paying higher and higher prices for diapers. For many commodities and services, the cost of production has actually decreased. Meanwhile, unchecked consolidation across nearly all sectors of the economy has enabled dominant players to boost prices with few consequences, disincentivizing new entrants and harming consumers. Research shows that price gouging can—and does—occur even in the absence of a market shock.

This reintroduction comes as President Biden and other lawmakers have drawn attention to corporate “shrinkflation” and other ways corporations are price gouging consumers.

This legislation is co-sponsored by Senators Tammy Baldwin (D-Wisc.), Bob Casey (D-Pa.), Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Ed Markey (D-Mass.), and Richard Blumenthal (D-Conn.). In the House of Representatives, this legislation was introduced by Rep. Jan Schakowsky (D-IL) and 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-Calif.) 

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.

Kobie Christian, Spokesperson, Unrig Our Economy: “During the COVID-19 pandemic, working families suffered as big corporations hiked costs for no other reason than to line their own pockets and pad their bottom line. Unfortunately, price gouging is just business as usual for big corporations in an economy rigged by corporate greed and against the American people. With the Price Gouging Prevention Act, Senators Warren, Baldwin, and Casey, and Congresswoman Schakowsky are standing up for working people by saying ‘no more’ to corporate profiteering during times when every day people are hurting the most. Unrig Our Economy is proud to endorse this legislation, which takes an important step toward building an economy that works for all working people, not corporate interests.”

Morgan Harper, Director of Policy and Advocacy, American Economic Liberties Project: “Senator Warren’s Price Gouging Prevention Act takes on the corporate greed that has led to skyrocketing prices for consumers. It empowers the FTC to stop price gouging in its tracks and could prove instrumental in lowering costs for hard working Americans. We are thrilled to see this bill introduced in the Senate and hope that our nation’s leaders will give it the support it deserves.”

Lisa Gilbert, Executive Vice President, Public Citizen: “Price gougers who exploit economic shock such as the recent pandemic are no better than battlefield scavengers. Sen. Warren’s welcome legislation empowers authorities including the Federal Trade Commission to combat this venal practice. Americans should not be victims of price predators.

Dr. Rakeen Mabud, Chief Economist and Managing Director of Policy and Research Groundwork Collaborative: "Corporations have exploited our inflation crisis with price hikes that have fed record-high profit margins and left families struggling to make ends meet. The Price Gouging Prevention Act takes important steps to safeguard families from excessive corporate profit chasing and tackles the rampant corporate power that enabled this in the first place."

Adam Ruben, Director, Economic Security Project Action: "Price gouging keeps basic goods like housing, groceries, childcare, and prescription drugs more expensive and increasingly out of reach for millions of families.  It is pure greed and is indefensible. The Price Gouging Prevention Act is a huge step towards stopping this practice by holding corporate price gougers accountable."

Joe Maxwell, President of Farm Action Fund: "Time and time again, we have called out large corporations for using natural disasters and supply chain disruptions as an excuse to gouge farmers and consumers. We called out the beef, fertilizer, and egg industries, only to see FTC's hands tied for lack of authority to investigate and bring to task these corrupt corporations. Senator Warren's legislation will provide the antitrust enforcement tool needed to reign in abusive power in the marketplace and bring justice for America's farmers and consumers."

Accountable.US President Caroline Ciccone: “While big corporate executives are keeping prices high and making huge profits, one thing is clear: this price-gouging is based on greed, not need. Corporate CEOs and lobbyists remain unconcerned that their unjustifiably high prices come at the expense of hardworking families, so it’s more important than ever that Congress lower costs by cracking down on this kind of gross corporate greed.” 

This legislation is endorsed by: the American Economic Liberties Project, Consumer Federation of America, Food & Water Watch, Groundwork Collaborative, Unrig Our Economy, Economic Security Project Action, Public Citizen, Farm Action Fund, the National Consumer Law Center (on behalf of its low-income clients), Oxfam America, and Accountable.us. 

As a champion for American consumers and a secure and healthy economy, Senator Warren has engaged in oversight of corporations for unfairly increasing prices for consumers. She has also been calling for more competition and stronger enforcement of antitrust laws to bring down prices for families: 

  • On December 12, 2023, Senator Warren urged the FTC to block the Kroger-Albertsons merger, which would give the five largest food retail companies control of 55 percent of all grocery sales, allowing them to further control and ultimately raise consumer prices, while also reducing job competition, decreasing wages, and decreasing the bargaining power of organized labor. 
  • On November 30, 2023, Senator Warren called out TransDigm for its refusal to provide cost and pricing information needed to prevent price gouging of taxpayers and the Department of Defense. 
  • On November 9, 2023, Senator Warren expressed disappointment at the FTC’s decision to allow pharmaceutical giant Amgen to move forward with its acquisition of Horizon Therapeutics (Horizon) given the potential impacts on the price of medicine.  
  • In the past few years, Senator Warren has urged the Biden administration to closely scrutinize potential anticompetitive mergers that could lead to higher prices for consumers and accelerate industry consolidation. She has led letters about the proposed mergers of Frontier and Spirit airlines, JetBlue and Spirit Airlines, Sanderson-Wayne, WarnerMedia-Discovery, and Amazon-MGM.
  • On March 16, 2022, Senator Warren introduced the Prohibiting Anticompetitive Mergers Act to help stomp out rampant industry consolidation that allows companies to raise consumer prices and mistreat workers. The bill would ban the biggest, most anticompetitive mergers and give the Department of Justice and Federal Trade Commission the teeth to reject deals in the first instance without court orders and to break up harmful mergers. 
  • On February 17, 2022, at a hearing, Senator Warren called out corporations for abusing their market power to raise consumer prices and boost profits. 
  • That same month, on February 8, 2022, Senator Warren requested the Department of Justice to take aggressive action against corporations violating antitrust laws to hike prices for consumers. 
  • On January 13, 2022, Senator Warren questioned Federal Reserve nominee Lael Brainard about market concentration and price gouging driving inflation.
  • At a hearing on January 11, 2022, Senator Warren pressed Fed Chair Jerome Powell on the role of corporate concentration in driving up prices for consumers during his renomination hearing to be Chair of the Board of Governors of the Federal Reserve System.
  • In a New York Times op-ed published on April 8, 2020, Senator Warren urged Congress to focus on cracking down on price gouging in its ongoing effort to address the impact of the coronavirus pandemic. 
  • On March 27, 2020, Senator Warren joined her colleagues in urging the FTC to use its full authority to prevent abusive price gouging on consumer health products during the COVID-19 pandemic.