Cracking Down on Price Gouging Act
- Sponsor
- Rep. Riley, Josh [D-NY-19]
- Committees
- Financial Services Committee (primary)
- Last action
- Jul 23, 2025
Bottom line
The bill significantly expands federal authority under the Defense Production Act to combat price gouging during various crises by defining new prohibitions, establishing a presumptive price increase threshold, and imposing substantial financial penalties.
What it actually does
This bill amends the Defense Production Act of 1950 (DPA) to explicitly prohibit price gouging of materials designated as scarce by the President and 'critical goods' experiencing an 'acute shortage'. It defines an 'unfairly excessive price' as a gross disparity, presumptively a 10% increase, relative to pre-crisis prices, while allowing for exceptions for legitimate business needs or additional costs. The bill also establishes a new penalty for violations, imposing a fine of the greater of $20,000 or 300% of the revenue generated from the violation.
Proponents argue
Proponents argue that this bill is essential to protect consumers from exploitation during emergencies and acute shortages, ensuring access to vital goods and services. They contend that clear federal standards and robust penalties are necessary to deter predatory pricing practices that can exacerbate suffering and economic hardship during times of crisis, thereby safeguarding public health, safety, and welfare.
Opponents contend
Opponents contend that the bill's broad definitions and low presumptive price increase threshold (10%) could disrupt critical supply chains by disincentivizing suppliers from bringing goods to market during crises, potentially leading to shortages rather than alleviating them. They argue that legitimate cost increases for businesses operating in challenging environments could be unfairly penalized, stifling the very market responses needed to address shortages.
The bill is short and relatively straightforward, making it accessible for a quick read and evaluation by an informed reader.
Section 2(1)(A)-(B)
Explicit Prohibition on Price Gouging under DPA
This provision amends Section 102 of the Defense Production Act of 1950 to explicitly include 'price gouging' alongside 'hoarding' as a prohibited act. Previously, the DPA focused on preventing accumulation for resale at excessive prices; this change directly targets the act of selling at unfairly high prices during designated periods.
Supporters argue
Supporters argue this change provides a clear legal basis for federal action against price gouging, closing a perceived loophole where only hoarding for resale was explicitly targeted. This strengthens consumer protection during emergencies.
Critics contend
Critics may argue that expanding federal intervention into pricing decisions could create market distortions and disincentivize suppliers from responding to increased demand during crises, potentially worsening shortages.
Tradeoffs
The provision balances the desire for consumer protection against potentially stifling market responses that could help alleviate shortages by allowing prices to reflect increased costs or demand.
Section 2(1)(D)-(E)
Broadened Scope of Prohibited Pricing and Covered Goods
This section redefines prohibited pricing to include selling or offering to sell at prices that 'grossly exceed prevailing market prices' or at an 'unfairly excessive price.' It also expands the scope of goods covered to include 'any critical good under an acute shortage,' in addition to materials designated as scarce by the President. This means more types of goods and more situations will fall under federal price gouging prohibitions.
Section 2(1)(G), new subsection (b)
Definition of 'Unfairly Excessive Price' and Exceptions
This new subsection defines an 'unfairly excessive price' as a 'gross disparity' in price compared to immediately prior to a crisis. It establishes a 'presumptive gross disparity' if the price increases by 10% or more relative to the pre-crisis price. However, it includes an important exception: a price is not unfairly excessive if it results from a legitimate business need of the seller or additional costs outside the seller's control.
Section 2(1)(G), new subsection (c)
Definitions of 'Acute Shortage' and 'Critical Good'
This new subsection provides comprehensive definitions for 'acute shortage' and 'critical good.' An 'acute shortage' is broadly defined to include negative supply impacts caused by disease, natural disaster, military conflict, terrorism, supply-chain disruptions, extreme industry consolidation, or other exigent constraints. A 'critical good' encompasses consumer food items, essential medical/emergency supplies, energy resources (fuel, electricity, heating oil), and any other essential good or service promoting public health, safety, or welfare.
Section 2(2)(B)
Enhanced Penalties for Price Gouging Violations
This provision amends Section 103 of the DPA to establish a specific and significantly increased penalty for violations of the price gouging prohibitions in Section 102. Any person found guilty will be fined the greater of $20,000 or 300% of the revenue generated in violation of the section.
This clause states that a price increase less than the presumptive 10% threshold can still constitute a 'gross disparity' and thus an 'unfairly excessive price.'
Section 2(1)(G), new subsection (b)(2)(B)
Why it matters:This is standard legislative practice to ensure flexibility in enforcement and prevent bad actors from exploiting a strict numerical threshold. It allows for prosecution of egregious cases even if they fall just under the 10% mark.
Case for: Proponents would argue this flexibility is crucial to catch sophisticated price gougers who might otherwise try to stay just below a fixed numerical threshold, ensuring the law remains effective against various forms of exploitation.
Case against: Opponents might argue that this clause introduces ambiguity, making it harder for businesses to know definitively what constitutes a violation, even if their price increases are minimal. This could lead to uncertainty and potentially over-enforcement.
Estimated impact: This provision ensures that the 10% threshold is a guideline, not a hard limit, potentially broadening the scope of prosecutable offenses beyond strictly defined numerical increases.
The definition of 'acute shortage' includes 'extreme industry consolidation' and 'any other similar exigent constraint' as causes for a negative supply impact.
Section 2(1)(G), new subsection (c)(1)(G) and (H)
Why it matters:This is likely intended to provide broad, forward-looking coverage for unforeseen or less common causes of supply disruptions, preventing the need for future amendments. It also allows for addressing market failures like consolidation.
Case for: Proponents would argue that including these broad categories ensures the DPA remains relevant and adaptable to emerging threats to supply chains, such as those caused by market concentration or novel crises not explicitly listed.
Case against: Opponents might argue that 'extreme industry consolidation' and 'any other similar exigent constraint' are excessively vague and could be interpreted broadly to justify federal intervention in normal market conditions, leading to regulatory overreach.
Estimated impact: These clauses significantly expand the potential triggers for federal price gouging prohibitions, moving beyond traditional emergency scenarios to potentially include economic factors or unforeseen events.