Price Gouging Prevention Act of 2025
- Sponsor
- Rep. Schakowsky, Janice D. [D-IL-9]
- Committees
- Financial Services Committee (primary)
- Last action
- Jul 17, 2025
Bottom line
This bill aims to curb price increases during market shocks by empowering the FTC and State Attorneys General to prosecute "grossly excessive" or "excessive" pricing, particularly by large entities with "unfair leverage," and mandates new corporate disclosures.
What it actually does
This bill makes it unlawful to sell or offer goods or services at a "grossly excessive price," particularly during "exceptional market shocks." It establishes presumptions of violation for entities with "unfair leverage" and provides an affirmative defense for smaller businesses based on legitimate cost increases. The bill significantly expands the enforcement powers of the Federal Trade Commission (FTC) and State Attorneys General, allowing them to seek injunctions, civil penalties, damages, and restitution. Additionally, it mandates new SEC disclosure requirements for publicly traded companies regarding pricing strategies and gross margins during market shocks.
Proponents argue
Supporters argue that this bill is essential for protecting consumers from exploitation and predatory pricing during emergencies and market disruptions. They contend it will hold large corporations accountable for unjustified price hikes, promote fair competition, and ensure that essential goods and services remain accessible and affordable when people are most vulnerable. The expanded enforcement powers and transparency requirements are seen as crucial tools to prevent profiteering.
Opponents contend
Critics may argue that the bill's definitions of "grossly excessive price" and "unfair leverage" are vague and could lead to arbitrary enforcement, chilling legitimate price adjustments. They contend that it could disincentivize businesses from maintaining or increasing supply during crises if they fear prosecution for recouping rapidly rising costs, potentially leading to shortages. Concerns about regulatory overreach, increased compliance burdens, and interference with free market principles are also likely to be raised.
The bill is moderately complex due to its detailed definitions and enforcement mechanisms, requiring careful reading to understand its full scope and implications.
Sec. 3(a)
Prohibition on Grossly Excessive Prices
This provision makes it unlawful for any person, regardless of their position in the supply chain or distribution network, to sell or offer for sale a good or service at a "grossly excessive price." This establishes the core prohibition against price gouging.
Supporters argue
Supporters argue this directly addresses exploitative pricing practices that harm consumers, especially during times of crisis, by establishing a clear legal standard against excessive pricing.
Critics contend
Critics may argue that the term "grossly excessive price" is vague and could lead to arbitrary enforcement, hindering legitimate business operations and creating regulatory uncertainty.
Tradeoffs
This provision balances the desire for strong consumer protection against potential overreach into market pricing mechanisms, requiring the FTC to define what constitutes 'grossly excessive'.
Sec. 3(b)
Affirmative Defense for Smaller Entities
This section provides an affirmative defense against price gouging claims for businesses whose ultimate parent entity earned less than $100 million in gross revenue from U.S. goods or services in the preceding 12 months. To qualify, the business must demonstrate that the price increase is directly attributable to additional, uncontrollable costs incurred in procuring, acquiring, distributing, or providing the good or service. The $100 million threshold is adjusted annually for inflation.
Sec. 3(c)
Presumptive Violations during Exceptional Market Shock
This provision establishes a presumption of price gouging if, during an "exceptional market shock," a person either has "unfair leverage" or uses the shock as a pretext to increase prices, and sells a good or service at an "excessive price" compared to its average price in the 120 days preceding the shock or compared to competing sellers during the shock. This shifts the burden of proof to the accused business.
Sec. 3(e)
Defining "Unfair Leverage"
This section defines "unfair leverage" for the purpose of presumptive violations. A person has unfair leverage if they earned at least $1 billion in gross U.S. revenue, discriminate between trading partners, are a "critical trading partner," engage in unfair/deceptive practices, or have a dominant market position (presumed at 40% or greater seller share, or 30% or greater buyer share). The $1 billion revenue threshold is inflation-adjusted annually.
Sec. 3(f)
Expanded FTC Enforcement Authority
This section treats price gouging violations as unfair or deceptive acts under the Federal Trade Commission Act, granting the FTC broad enforcement powers. These powers include seeking permanent, temporary, or preliminary injunctions, civil penalties (up to $25,000 or 5% of ultimate parent entity's revenue for non-leveraged entities, and 5% of revenue for leveraged entities), damages, restitution, and other equitable relief. It also mandates FTC rulemaking to define key terms like "market," "grossly excessive price," and "excessive price."
Sec. 3(g)
State Attorney General Enforcement
This section authorizes State Attorneys General to bring civil actions in any appropriate U.S. district court or other court of competent jurisdiction to enjoin price gouging violations, enforce compliance, obtain injunctions, civil penalties, damages, restitution, or other equitable relief on behalf of state residents. States must provide notice to the FTC before initiating action, but their investigatory powers and existing state laws are preserved. Federal action takes precedence over state action against the same defendant for the same violation.
Sec. 4
SEC Disclosures on Pricing and Margins
This section requires publicly traded companies ("covered issuers") to include detailed information in their SEC Form 10-K or 10-Q filings following a quarter with an "exceptional market shock." The disclosures must include percentage changes in sales volume and average sales price by product category, gross margins, the share of revenue increase attributable to cost vs. volume changes, and a detailed narrative explanation of the company's pricing strategy, including rationale for price increases exceeding cost increases.
The bill defines "critical trading partner" as a person with the ability to restrict, impede, or foreclose access to inputs, customers, goods, services, technology, platform, facilities, or tools in a way that harms competition or limits the ability of customers or suppliers to carry out business effectively.
Sec. 2(2)
Why it matters:Standard legislative practice to define terms upfront, but its operational significance for enforcement is not immediately apparent without reading Section 3(e) on "unfair leverage."
Case for: Proponents argue this definition is crucial for identifying entities with significant market power that can exert undue influence on supply chains and pricing, ensuring that the bill targets those most capable of exploitation.
Case against: Critics might argue its broad language could capture a wide range of businesses, potentially leading to overreach in enforcement and discouraging innovation or investment in critical infrastructure.
Estimated impact: Broadens the scope of entities that can be deemed to have "unfair leverage," increasing the number of businesses subject to presumptive price gouging violations during exceptional market shocks.
This subsection details the civil penalties for price gouging violations. If the person does not have "unfair leverage," the penalty is the lesser of $25,000 or 5% of the ultimate parent entity's revenues during the preceding 12-month period. If the person *does* have "unfair leverage," the penalty is 5% of the ultimate parent entity's revenues during the preceding 12-month period, with no $25,000 cap.
Sec. 3(f)(E)
Why it matters:It is standard practice to detail penalties within enforcement provisions, but the structure of these penalties makes them particularly impactful for larger entities.
Case for: Proponents argue these penalties are substantial enough to deter price gouging, especially for large corporations, and are scaled to reflect the severity of the offense and the entity's capacity to cause harm.
Case against: Opponents might argue that a 5% revenue penalty, especially for large entities, could be disproportionately punitive and could lead to significant financial instability for businesses, even for minor or unintentional violations, potentially discouraging investment.
Estimated impact: Establishes potentially very high financial risks for large corporations found in violation, significantly increasing the stakes of compliance and potentially leading to multi-billion dollar penalties.
This subsection directs the FTC to define the term "grossly excessive price" for the purposes of the Act. It specifically instructs the Commission to consider whether to provide that such term shall include a price for a good or service that is an amount equal to or greater than 120 percent (or a lesser percentage, as determined appropriate by the Commission) of the average price for such good or service in the market during the 6-month period preceding the alleged violation.
Sec. 3(f)(F)(iii)
Why it matters:It's a technical instruction for agency rulemaking, making it less prominent than direct statutory prohibitions, but it provides critical guidance for how the law will be applied in practice.
Case for: Proponents argue this provides a clear benchmark for the FTC to develop a workable definition, ensuring consistency and predictability in enforcement while allowing flexibility for the Commission to adjust the percentage as appropriate.
Case against: Critics might argue that a fixed percentage increase (like 120%) over a historical average may not adequately account for legitimate, rapid cost increases during a crisis, potentially leading to false positives and penalizing businesses for unavoidable market dynamics.
Estimated impact: This guidance will heavily influence how price gouging is legally defined and enforced, directly impacting how businesses can adjust prices during market shocks and setting a de facto threshold for investigations.