WASHINGTON, D.C. – U.S. Senator Cory Booker (D-NJ) today unveiled a bill to ban price-gouging of essential goods and services during emergencies. The legislation comes as consumers in New Jersey and across the country are encountering steep price increases for in-demand items such as face masks, hand sanitizer, and disinfecting cleaners. According to the New Jersey Attorney General’s Division of Consumer Affairs, the Garden State has received more than 3,600 complaints about such price increases and has issued more than 700 cease-and-desist letters to businesses reported to have engaged in price-gouging.
“While these perilous and unprecedented times have brought out some of the very best in Americans, we’ve also seen some of the worst – specifically, unscrupulous actors who have tried to profit off this crisis by massively inflating the cost of essential items,” Booker said. “While Americans are struggling to make ends meet and protect their loved ones, the last thing they should have to worry about is becoming a victim of price-gouging. Our legislation would crack down on those seeking to profit off of people’s pain.”
Under the Prevent Emergency and Disaster Profiteering Act, which Booker will formally introduce when the Senate reconvenes, price-gouging would be defined as raising the price of an essential item by more than a certain allowable threshold above the average price of the item during the 90 days before an emergency or disaster. The Secretary of Health and Human Services or the FEMA Administrator would publish a list of essential items that the Act covers, and determine the percentage threshold above which businesses wouldn’t be able to hike their prices.
For example, if the HHS Secretary determined that 10 percent was an allowable threshold, an entity would be price-gouging if it raised the price of an essential product by more than 10 percent above its average price for the previous 90 days.
Businesses that are found to engage in price gouging would be in violation of the Federal Trade Commission Act. The Federal Trade Commission would be empowered to enforce the Act and state attorneys general could also bring legal actions under this authority.
The bill includes some commonsense exceptions, including if the cost of producing or transporting the good has appreciably increased from factors outside the seller’s control.
Price hikes by unscrupulous actors are unfortunately not new: after Hurricane Sandy, many New Jerseyans similarly complained of price-gouging on items such as generators, gas, and hotel rooms.
While several states, including New Jersey, have state laws banning price-gouging, no such federal measure exists, so Booker’s bill would protect consumers in more than a dozen states that don’t have anti-price-gouging laws, or in states where only a few items are covered by such laws. New Jersey’s anti-price-gouging law took effect on March 9.
Full text of the legislation is available here.