Price Gouging Prevention Act of 2025
If enacted, HB4528 will empower the FTC to tackle price gouging more effectively, allowing both state attorneys general and the FTC to initiate actions against businesses that engage in such practices. The bill outlines the criteria under which prices can be deemed grossly excessive, which includes considerations of a company's revenue and the justification behind price increases. As a part of the enforcement mechanism, firms that significantly raise prices during critical market conditions could be subjected to fines and other penalties. An affirmative defense is available for smaller businesses, which can prove that their price increases are directly linked to unavoidable cost increases.
House Bill 4528, titled the 'Price Gouging Prevention Act of 2025', is designed to make price gouging unlawful and enhance the Federal Trade Commission's (FTC) ability to seek permanent injunctions and equitable relief against violations. The bill defines key terms such as 'exceptional market shock' which can include natural disasters and public health emergencies, thereby targeting situations where prices drastically increase due to unforeseen circumstances. This is particularly relevant in the wake of events that disrupt market equilibrium, potentially leading to consumer exploitation during times of crisis.
The bill's introduction has sparked discussions about the balance between regulating prices and allowing free market mechanisms to operate. Proponents argue that it is a necessary protective measure for consumers, especially vulnerable populations, to ensure fair pricing during emergencies. Critics, on the other hand, might express concerns regarding potential overreach and the implications for businesses, suggesting that excessive regulation could stifle competition and lead to unintended consequences in supply chains. The specifics of defining 'grossly excessive price' will also be pivotal in shaping the law's effectiveness and acceptance amongst various stakeholders.