Cracking Down on Price Gouging Act
Summary
The "Cracking Down on Price Gouging Act" amends the Defense Production Act of 1950 to establish stricter prohibitions on price gouging of certain materials and critical goods during emergencies like diseases, natural disasters, or supply chain disruptions. It defines 'unfairly excessive price' as a gross disparity between the current price and the price before the emergency, with a presumptive gross disparity including a 10% price increase. The bill outlines penalties for violations, including fines.
Expected Effects
This act aims to protect consumers from exploitation during crises by preventing businesses from excessively raising prices on essential goods and services. It provides a legal framework for addressing price gouging, potentially stabilizing markets during emergencies. The amendment also defines what constitutes an 'acute shortage' and 'critical good'.
Potential Benefits
- Protects consumers from price gouging during emergencies.
- Stabilizes markets for essential goods and services during crises.
- Provides clear definitions of 'acute shortage' and 'critical good'.
- Establishes penalties for those who violate the act.
- May deter businesses from engaging in price gouging practices.
Potential Disadvantages
- Could potentially lead to unintended consequences such as supply shortages if businesses are unwilling to sell goods at controlled prices.
- The 10% threshold may be seen as arbitrary and could be difficult to enforce consistently.
- Defining 'legitimate business need' and 'additional costs' could lead to legal challenges and loopholes.
- May increase regulatory burden on businesses.
- Potential for political manipulation in declaring 'acute shortages'.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Commerce Clause (Article I, Section 8, Clause 3) of the U.S. Constitution, which grants Congress the power to regulate interstate commerce. Price gouging during emergencies can disrupt the flow of essential goods and services across state lines, justifying federal intervention. The act also relates to promoting the general welfare, as stated in the Preamble.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).