Bill cracks down on excessive price increases
Since Fall 2023, Senator Casey has produced four reports detailing his investigations into excessive price increases, reduction in product quantity, and hidden junk fees—all motivated by corporate greed
According to government data compiled in Casey’s Greedflation series, from July 2020 through July 2022, inflation rose by 14 percent while corporate profits rose by more than 74 percent
Federal Reserve research found corporate profits accounted for all of inflation from July 2020 through July 2021 and 41 percent of all inflation from July 2020 through July 2022
Casey: “The American people should not have to tolerate corporate executives squeezing them for every last nickel and dime”
Washington, D.C. – Today, U.S. Senators Bob Casey (D-PA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on Children & Families, Elizabeth Warren (D-MA), and Tammy Baldwin (D-WI) and U.S. Representative Jan Schakowsky (D-IL-9) introduced the Price Gouging Prevention Act, which would crack down on corporate price gouging and protect American families from greedflation. The bill would create a new a federal ban on grossly excessive price increases, and authorize the Federal Trade Commission (FTC) and state attorneys general to enforce the ban. Since November 2023, Chairman Casey has been investigating corporate price gouging and other actions by big corporations that have squeezed the budgets of American families and contributed to the increase in inflation.
“Corporations are raising the prices of everyday household items to rake in record profits at the expense of Pennsylvania families,” said Chairman Casey. “Our bill will crack down on greedflation by finally prohibiting price gouging and holding corporations accountable for raising costs excessively. It is long past time we take on big corporations and lower costs for families.”
“Giant corporations are squeezing American families for fatter profits. It’s time to give the Biden administration stronger tools,” said Senator Warren. “Senate Democrats and I are renewing our push for a new law to crack down on corporate price gouging.”
“Big corporations are price gouging Americans, taking in record profits, and giving their executives lavish bonuses, all while Wisconsin families struggle to get by. It’s wrong and we need to do more to hold these big corporations accountable and give Wisconsinites some breathing room,” said Senator Baldwin. “I am proud to lead this legislation to bring some basic transparency when Americans see rapid price hikes and help stop those at the top of the food chain from exploiting crises to stick families with exorbitant prices.”
“As large grocery chains continue to rake in record profits, there are many families struggling to put food on the table. The cost of basic groceries has jumped by 25% over the past four years. Price gouging is harming consumers and is fueling the elevated profit margins among greedy corporations. We live in the richest country in the world at the richest moment in history. Yet, many Americans are unable to feel the full magnitude of our wealth,” said Congresswoman Jan Schakowsky. “Our bill empowers the FTC to hold these price gouging companies accountable when they take advantage of American consumers. People must always come before profits.”
“During the COVID-19 pandemic, working families suffered as big corporations hiked costs for no other reason than to line their own pockets and pad their bottom line. Unfortunately, price gouging is just business as usual for big corporations in an economy rigged by corporate greed and against the American people,” said Kobie Christian, Spokesperson, Unrig Our Economy. “With the Price Gouging Prevention Act, Senators Warren, Baldwin, and Casey, and Congresswoman Schakowsky are standing up for working people by saying ‘no more’ to corporate profiteering during times when every day people are hurting the most. Unrig Our Economy is proud to endorse this legislation, which takes an important step toward building an economy that works for all working people, not corporate interests.”
"Price gouging keeps basic goods like housing, groceries, childcare, and prescription drugs more expensive and increasingly out of reach for millions of families. It is pure greed and is indefensible,” said Adam Ruben, Director, Economic Security Project Action. “The Price Gouging Prevention Act is a huge step towards stopping this practice by holding corporate price gougers accountable."
"Corporations have exploited our inflation crisis with price hikes that have fed record-high profit margins and left families struggling to make ends meet,” said Dr. Rakeen Mabud, Chief Economist and Managing Director of Policy and Research, Groundwork Collaborative. “The Price Gouging Prevention Act takes important steps to safeguard families from excessive corporate profit chasing and tackles the rampant corporate power that enabled this in the first place."
During the COVID-19 pandemic, big corporations took advantage of the crisis to prey on consumers through greedflation: raising prices by even more than necessary to cover increases in their costs, and hiding behind inflation and supply chain disruptions to do it. Now that the market shock of the pandemic has largely abated, corporations’ costs are coming down and profits are rising. But for American families, prices remain high.
Chairman Casey believes more must be done to hold corporations accountable for taking advantage of American workers and their families and has a plan to lower costs for working families by following four overall goals: put more money in the pockets of working families; make big corporations pay their fair share; fight unfair corporate price gouging; and take on corporate monopolies to increase competition and lower costs.
In November 2023, Chairman Casey released the first report in his Greedflation series, “Greedflation: How Corporations Are Making Record Profits on the Backs of American Families,” detailing how big corporations are using inflation as cover to raise prices and rake in record profits at the expense of middle-class American families and laying out Senator Casey’s vision to hold greedy corporations accountable. Corporate executives claim they’ve “earned the right” to raise prices and that their products “are worth paying a little bit more for.”
Ahead of Thanksgiving, Casey released his second report, “Stuffing Their Pockets: How Big Food and Agriculture Businesses Are Making Your Holiday Meals More Expensive," examining how the agribusiness companies that process Americans’ food have increased prices for everyday staple foods and raising questions about why those price increases are necessary, particularly during the holiday season. Some of these companies have a history of engaging in price-fixing, colluding to raise prices, anti-competitive conduct, and touting their ability to raise prices without limit. Seeking answers, Senator Casey sent a letter to the Federal Trade Commission and United States Department of Agriculture requesting that the agencies use all necessary resources to investigate possible unfair pricing practices of major chicken and pork processors in the United States. The Federal Trade Commission, in response, assured Senator Casey that policing potentially anticompetitive conduct in food industries continues to be a top priority for the Commission given the high stakes for American consumers, farmers, and the Nation’s economy.
In December 2023, Casey released his third report of his Greedflation series, “Less Bang for Your Buck: Casey Releases Shrinkflation Report Exposing Big Corporations for Reducing Product Size While Keeping Prices High,” calling out household consumer products, food, and beverage corporations for reducing the size of household consumer goods, from toilet paper to cereals to snacks, while continuing to sell them at the same retail price. To better protect families’ pocketbooks, Senator Casey sent letters to the trade associations representing household consumer products, food, and beverage corporations demanding answers about pricing strategies, package size practices, and how shrinkflation affects customers:
In January 2024, Casey released his fourth report of his Greedflation series, “Additional Charges May Apply: How Big Corporations Use Hidden Fees to Nickel, Dime, and Deceive American Families” detailing how big corporations are tacking on excessive fees at the tail end of everyday purchases, from internet plans to ATM withdrawals. Senator Casey believes that no Pennsylvanian should be blindsided by a junk fee and that the negative impacts of hidden fees can be mitigated by: fighting deceptive practices that allow corporations to hide the fees they charge consumers; preventing corporations from deceptively passing along their expenses to working families through bogus fees; and protecting businesses that are honest about their pricing structures.
In a letter to the Government Accountability Office that same month, Chairman Casey pushed the government watchdog agency to examine the effects of corporate greed on American consumers.
The Price Gouging Prevention Act specifically would:
- Prohibit price gouging at the federal level – anytime and anywhere. The proposed bill would clarify that price gouging is an unfair and deceptive practice under the FTC Act. It would allow the FTC and state attorneys general to stop sellers from charging a grossly excessive price, regardless of where the price gouging occurs in a supply chain or distribution network.
- Create an affirmative defense for small businesses acting in good faith. Small and local businesses sometimes must raise prices in response to crisis-driven increases in their costs because they have little negotiating power with their price-gouging suppliers. This affirmative defense protects small businesses earning less than $100 million from unjustified litigation if they show legitimate cost increases.
- Target dominant companies that have exploited the pandemic to boost profits. The bill would create a rebuttable presumption of price gouging against firms that exercise unfair leverage and companies that brag about increasing prices during periods of inflation.
- Require public companies to clearly disclose costs and pricing strategies. During periods of exceptional market shock, the bill requires public companies to transparently disclose and explain changes in their cost of goods sold, gross margins, and pricing strategies in their quarterly SEC filings.
- Provide additional funding to the FTC. The bill appropriates $1 billion in funding to the FTC to carry out its work.
This legislation is co-sponsored by U.S. Senators Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Ed Markey (D-MA), and Richard Blumenthal (D-CT). In the House of Representatives, this legislation was co-sponsored by Representatives Eleanor Holmes Norton (D-DC), Hank Johnson (D-GA-4), Ro Khanna (D-CA-17), Jerry Nadler (D-NY-12), Mary Gay Scanlon (D-PA-5), and Paul Tonko (D-NY-20).
Read more about the Price Gouging Prevention Act here.
###
