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US Senators Introduce Price Gouging Act of 2024 to Tackle Excessive Pricing

 |  February 29, 2024

In response to the pervasive issue of skyrocketing prices on essential products, a group of US Senators, including Pennsylvania’s John Fetterman and Bob Casey, have taken a bold step by introducing the Price Gouging Act of 2024. This legislation, spearheaded by Senator Elizabeth Warren of Massachusetts, aims to curb the practice of charging customers grossly excessive prices, particularly during periods of exceptional market shock.

The proposed bill demands transparency from public companies, requiring them to disclose any changes in pricing and provide a clear rationale for such changes in their Securities and Exchange Commission (SEC) filings. Senator Fetterman emphasized the necessity of halting the exploitation of consumers, stating, “For too long, corporations have gotten away with jacking up prices to line their shareholders’ pockets with the hard-earned dollars of working Americans. This bill will put an end to that.”

One of the key focuses of the legislation is addressing the exploitation of crises, such as the ongoing pandemic, by certain corporations to bolster their profits unfairly. Moreover, provisions within the bill seek to safeguard small and local businesses that may be compelled to adjust prices in good faith.

To enforce these regulations effectively, the bill allocates $1 billion in funding to the Federal Trade Commission (FTC). Representative Jan Schakowsky of Illinois is leading the effort to introduce the bill in the House, reflecting bipartisan concern over the issue.

The phenomenon of price gouging by major corporations has become so prevalent that financial analysts have coined a term for it – “Greedflation.” Data from the U.S. Bureau of Labor Statistics reveals significant price hikes across various sectors, with food prices witnessing a notable surge of 10.4% between 2021 and 2022. Additionally, corporate profits soared by 22.6% in 2021 and continued to rise by 9.8% in 2022, as reported by the Bureau of Economic Analysis.

While the Price Gouging Act of 2024 offers a promising solution to mitigate these concerning trends, it still faces a legislative journey ahead. Currently introduced in committee, the bill must progress through both the House and the Senate before it can be enacted into law.

Source: WFMJ