Price Gouging Prevention Act of 2025
- Sponsor
- Sen. Warren, Elizabeth [D-MA]
- Committees
- Commerce, Science, and Transportation Committee (primary)
- Last action
- Jul 17, 2025
Bottom line
This bill aims to combat price gouging by establishing federal prohibitions, empowering the FTC and State Attorneys General with enforcement tools, and increasing corporate transparency during market disruptions.
What it actually does
This bill makes it unlawful to sell goods or services at a "grossly excessive price," particularly during "exceptional market shocks." It expands the enforcement powers of the Federal Trade Commission (FTC) and State Attorneys General to combat price gouging and mandates new, detailed financial disclosures from publicly traded companies during market disruptions.
Proponents argue
Supporters argue the bill protects consumers from predatory pricing during emergencies and market disruptions, ensures fair competition, and holds large corporations accountable for unjustified price increases. They contend it addresses a critical gap in federal law and provides necessary tools to curb inflation and corporate profiteering.
Opponents contend
Critics might argue that the bill's definitions of "grossly excessive price" and "unfair leverage" are vague, could lead to arbitrary enforcement, and may disincentivize businesses from supplying goods during crises due to fear of legal repercussions, potentially exacerbating shortages. They may also raise concerns about the broad expansion of FTC powers and potential for overreach.
The bill is relatively short and its core provisions are understandable, but the legal definitions and enforcement mechanisms require careful reading to grasp the full implications.
Sec. 3(a)
Prohibition on Grossly Excessive Prices
This provision makes it illegal for any person to sell or offer for sale a good or service at a price that is considered "grossly excessive." This prohibition applies to all entities within a supply chain or distribution network, regardless of their specific role.
Supporters argue
Proponents argue this provision directly addresses the problem of price gouging, ensuring that consumers are not exploited with exorbitant prices, especially during times of need or market instability.
Critics contend
Opponents may argue that a broad prohibition without clear, objective definitions could be difficult to enforce consistently and might inadvertently penalize legitimate price adjustments driven by market forces or increased costs.
Tradeoffs
The provision balances the desire to protect consumers from price exploitation against the need for market flexibility and businesses' ability to adjust prices based on supply, demand, and operational costs.
Sec. 3(b)
Affirmative Defense for Small Businesses and Cost Increases
This section provides an affirmative defense against price gouging accusations. It applies if the seller's ultimate parent entity had less than $100 million in U.S. gross revenue in the preceding 12 months, AND the price increase is directly due to additional costs that were beyond the seller's control and incurred in providing the good or service. The $100 million threshold will be adjusted annually for inflation.
Sec. 3(c)
Presumptive Violations During Exceptional Market Shocks
This provision establishes a presumption that a person is violating the price gouging prohibition if, during an "exceptional market shock," they possess "unfair leverage" or are using the shock as a pretext to raise prices, and they sell a good or service at an "excessive price" compared to pre-shock averages or prices from competing sellers during the shock. This presumption can be rebutted by clear and convincing evidence of uncontrollable cost increases.
Sec. 3(e)
Defining "Unfair Leverage"
This section defines "unfair leverage," a key criterion for the presumptive violation during market shocks. A person has unfair leverage if they earned at least $1 billion in U.S. gross revenue in the preceding 12 months, discriminate between trading partners, are a "critical trading partner," engage in unfair/deceptive practices, or have a dominant position in a market (presumed at 40% seller share or 30% buyer share). The $1 billion threshold is inflation-adjusted.
Sec. 3(f)
Federal Trade Commission Enforcement Powers
This section grants the Federal Trade Commission (FTC) broad authority to enforce the price gouging prohibition. Violations are treated as unfair or deceptive acts, allowing the FTC to bring civil actions for injunctions, civil penalties, damages, and restitution. Civil penalties can be up to $25,000 or 5% of the ultimate parent entity's revenue (whichever is less) for those without unfair leverage, and 5% of revenue for those with unfair leverage. The FTC is also mandated to issue rules defining key terms like "market," "grossly excessive price," and "exceptional market shock."
Sec. 3(g)
State Attorney General Enforcement Powers
This section authorizes State Attorneys General to bring civil actions in federal or state courts against persons violating the price gouging prohibition. They can seek injunctions, civil penalties, damages, and restitution on behalf of state residents. States must provide notice to the FTC before initiating an action, but the FTC can intervene. The provision explicitly states it does not preempt state or local laws.
Sec. 4
SEC Filings Disclosure Requirements
This section requires publicly traded companies (covered issuers) to include detailed financial and narrative disclosures in their quarterly (10-Q) or annual (10-K) SEC filings following a quarter during which an "exceptional market shock" occurred. These disclosures must include percentage changes in sales volume and average prices, gross margins, revenue attribution to cost vs. volume changes, cost changes by category, and a detailed narrative explaining pricing strategy, including rationales for price increases exceeding cost increases.
Sec. 5
Funding for the Federal Trade Commission
This section appropriates $1,000,000,000 to the Federal Trade Commission (FTC) for fiscal year 2025. These funds are designated to remain available until September 30, 2033, for the purpose of carrying out the work of the Commission, which would include its new responsibilities under this Act.
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:It is standard legislative practice to define terms upfront. However, the operational impact of this specific definition is indirect, requiring a reader to connect it to later, more substantive provisions.
Case for: Proponents argue this definition is crucial for identifying and targeting entities that hold significant power within supply chains or markets, enabling the bill to address abuses of such power effectively.
Case against: Critics might argue that the definition is broad and potentially vague, raising concerns that it could be applied to legitimate business relationships or market positions, leading to unintended regulatory overreach.
Estimated impact: Significantly expands the scope of entities that could be deemed to have "unfair leverage," thereby increasing the number of businesses subject to presumptive price gouging violations during market shocks.
Establishes a two-tiered civil penalty structure for violations: for persons without "unfair leverage," the penalty is the lesser of $25,000 or 5% of the ultimate parent entity's preceding 12-month revenues; for persons with "unfair leverage," the penalty is 5% of the ultimate parent entity's preceding 12-month revenues.
Sec. 3(f)(2)(E)
Why it matters:Detailing penalty structures is common in legislative text. The nuance here reflects an attempt to scale penalties based on the size and market power of the violator.
Case for: Proponents argue this tiered approach ensures that penalties are appropriately scaled, providing a significant deterrent for large corporations with market power while offering a more proportionate penalty for smaller entities.
Case against: Critics might argue that a penalty of 5% of an ultimate parent entity's revenue could be excessively punitive, even for large corporations, and could lead to severe financial distress or disincentives for business operations.
Estimated impact: Could result in substantial financial penalties for large corporations found in violation, acting as a significant deterrent. The specific calculation method differentiates impacts based on a business's size and market power.
Directs the Federal Trade Commission (FTC) to define the term "grossly excessive price" through rulemaking, using any metric it deems appropriate. It also requires the FTC to consider whether this definition should include a price that is 120 percent (or a lesser percentage) of the average price for such good or service in the market during the 6-month period preceding the alleged violation.
Sec. 3(f)(2)(F)(iii)
Why it matters:It is common practice to delegate technical definitions to expert agencies like the FTC, allowing for flexibility and adaptation to market realities. However, this leaves a critical aspect of the bill's enforceability to future regulatory action.
Case for: Proponents argue that delegating this definition to the FTC allows for the development of a nuanced, data-driven, and adaptable standard that can account for various market conditions and types of goods or services.
Case against: Critics might argue that leaving such a fundamental definition to rulemaking creates significant uncertainty for businesses, making it difficult to comply with the law until regulations are finalized, and potentially opening the door to politically influenced interpretations.
Estimated impact: The ultimate scope and practical impact of the entire price gouging prohibition will heavily depend on how the FTC defines "grossly excessive price." This definition will be central to all enforcement actions.