Price Gouging Prevention Act of 2025
Summary
The Price Gouging Prevention Act of 2025 aims to prevent businesses from selling goods or services at excessively high prices during exceptional market shocks, such as natural disasters or public health emergencies. It grants the Federal Trade Commission (FTC) expanded authority to seek injunctions and equitable relief against price gouging. The bill also requires certain companies to disclose pricing information in their SEC filings during and after such events.
Expected Effects
The Act would make price gouging unlawful nationwide, providing consumers with greater protection during crises. It empowers the FTC and state attorneys general to enforce these provisions, potentially leading to civil penalties for violators. Additionally, increased transparency through SEC filings may deter companies from engaging in price gouging.
Potential Benefits
- Protects consumers from exploitation during emergencies by preventing excessive price increases.
- Empowers the FTC and state attorneys general to take action against price gougers.
- Increases transparency in pricing practices during market shocks through SEC disclosures.
- Provides a legal framework for defining and addressing unfair leverage in pricing.
- Offers an affirmative defense for smaller businesses, ensuring they are not unfairly penalized.
Potential Disadvantages
- Could potentially lead to unintended consequences, such as reduced supply if businesses are unwilling to sell goods or services at regulated prices during emergencies.
- May increase compliance costs for businesses, particularly larger companies subject to SEC disclosure requirements.
- The definition of "grossly excessive price" is left to the FTC, which could lead to uncertainty and potential for arbitrary enforcement.
- The act could face legal challenges based on arguments related to free market principles and government overreach.
- Potential for increased litigation as businesses and regulators interpret and apply the provisions of the Act.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the US Constitution is complex. Congress has the power to regulate interstate commerce under Article I, Section 8, which could justify federal intervention in price gouging. However, arguments could be made that the bill infringes on economic liberties or due process if the definitions and enforcement are overly broad or arbitrary. The Tenth Amendment reserves powers not delegated to the federal government to the states, raising questions about the extent to which the federal government can preempt state laws on price gouging.
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).