Price Gouging Prevention Act of 2022
Bill: H.R.7736 | Sponsor: Rep. Schakowsky, Janice D. (D-IL)
Policy area: Commerce

Summary:
Price Gouging Prevention Act of 2022
This bill generally makes it unlawful to sell or offer for sale a good or service at an unconscionably excessive price during an exceptional market shock.
The bill also provides additional funding to the Federal Trade Commission.

To make price gouging unlawful, to expand the ability of the Federal 
 Trade Commission to seek permanent injunctions and equitable relief, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Price Gouging 
Prevention Act of 2022''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Prevention of price gouging.
Sec. 4. Disclosures in SEC filings.
Sec. 5. Funding.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Critical trading partner.--The term ``critical trading 
        partner'' means a person that has the ability to restrict, 
        impede, or foreclose access to its inputs, customers, partners, 
        goods, services, technology, platform, facilities, or tools in 
        a way that harms competition or limits the ability of the 
        customers or suppliers of the person to carry out business 
        effectively.
            (3) Exceptional market shock.--The term ``exceptional 
        market shock'' means any change or imminently threatened (as 
        determined under guidance issued by the Commission) change in 
        the market for a good or service resulting from a natural 
        disaster, failure or shortage of electric power or other source 
        of energy, strike, civil disorder, war, military action, 
        national or local emergency, public-health emergency, or any 
        other cause of an atypical disruption in such market.
            (4) Good or service.--The term ``good or service'' means 
        any good or service offered in commerce.
            (5) State.--The term ``State'' means each of the several 
        States, the District of Columbia, each commonwealth, territory, 
        or possession of the United States, and each federally 
        recognized Indian Tribe.
            (6) Ultimate parent entity.--The term ``ultimate parent 
        entity'' has the meaning given the term in section 801.1 of 
        title 16, Code of Federal Regulations (or any successor 
        regulation).

SEC. 3. PREVENTION OF PRICE GOUGING.

    (a) In General.--It shall be unlawful for a person to sell or offer 
for sale a good or service at an unconscionably excessive price during 
an exceptional market shock, regardless of the person's position in a 
supply chain or distribution network.
    (b) Affirmative Defense.--
            (1) In general.--Subsection (a) shall not apply to the 
        sale, or offering for sale, of a good or service by a person 
        if--
                    (A) the person's ultimate parent entity earned less 
                than $100,000,000 in gross United States revenue during 
                the preceding 12-month period; and
                    (B) the person demonstrates by a preponderance of 
                the evidence that the increase in the price of the good 
                or service involved is directly attributable to 
                additional costs that are not within the control of the 
                person and are incurred by the person in procuring, 
                acquiring, distributing, or providing the good or 
                service.
            (2) Inflation adjustment.--Starting in calendar year 2023, 
        the Commission shall annually adjust the amount specified in 
        paragraph (1)(A) to reflect the change in the consumer price 
        index for all urban consumers published by the Bureau of Labor 
        Statistics.
    (c) Presumptive Violations.--A person shall be presumed to be in 
violation of subsection (a) if, during an exceptional market shock, it 
is shown by a preponderance of the evidence that the person--
            (1)(A) has unfair leverage; or
            (B) is using the effects or circumstances related to the 
        exceptional market shock as a pretext to increase prices; and
            (2) regardless of the person's position in a supply chain 
        or distribution network, sells or offers for sale a good or 
        service at an excessive price compared to--
                    (A) the average price at which the good or service 
                was sold or offered for sale by all competing sellers 
                in the market during the 120-day period preceding such 
                exceptional market shock; or
                    (B) the average price at which the good or service 
                was sold or offered for sale by the person in the 
                market during the 120-day period preceding such 
                exceptional market shock.
    (d) Rebuttal.--A person may rebut a presumption under subsection 
(c) if the person demonstrates by clear and convincing evidence that 
the increase in the price of the good or service involved is directly 
attributable to additional costs that are not within the control of the 
person and are incurred by the person in procuring, acquiring, 
distributing, or providing the good or service.
    (e) Unfair Leverage.--
            (1) In general.--For purposes of subsection (c), a person 
        has unfair leverage if the person--
                    (A) earned at least $1,000,000,000 in gross United 
                States revenue during the preceding 12-month period;
                    (B) discriminates between otherwise equal trading 
                partners in the same market by applying differential 
                prices or conditions;
                    (C) is a critical trading partner; or
                    (D) has a characteristic described in a rule 
                promulgated by the Commission that further defines 
                unfair leverage.
            (2) Inflation adjustment.--Starting in calendar year 2023, 
        the Commission shall annually adjust the amount specified in 
        paragraph (1)(A) to reflect the change in the consumer price 
        index for all urban consumers published by the Bureau of Labor 
        Statistics.
    (f) Enforcement by FTC.--
            (1) Unfair or deceptive acts or practices.--A violation of 
        this section or a regulation promulgated under this section 
        shall be treated as a violation of a rule defining an unfair or 
        deceptive act or practice prescribed under section 18(a)(1)(B) 
        of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
            (2) Powers of the commission.--Except as otherwise 
        provided, the Commission shall enforce this section in the same 
        manner, by the same means, and with the same jurisdiction, 
        powers, and duties as though all applicable terms and 
        provisions of the Federal Trade Commission Act (15 U.S.C. 41 et 
        seq.) were incorporated into and made a part of this section. 
        Any person who violates this section shall be subject to the 
        penalties and entitled to the privileges and immunities 
        provided in the Federal Trade Commission Act.
            (3) Independent litigation authority.--If the Commission 
        has reason to believe that a person has violated this section, 
        the Commission may bring a civil action in any appropriate 
        United States district court to--
                    (A) enjoin any further such violation by such 
                person;
                    (B) enforce compliance with this section;
                    (C) obtain a permanent, temporary, or preliminary 
                injunction;
                    (D) obtain civil penalties;
                    (E) obtain damages, restitution, or other 
                compensation on behalf of aggrieved consumers; or
                    (F) obtain any other appropriate equitable relief.
            (4) Civil penalties.--In addition to any other penalties as 
        may be prescribed by law, each violation of this section shall 
        carry a civil penalty not to exceed--
                    (A) if the person who committed the violation does 
                not have unfair leverage, the lesser of--
                            (i) $25,000; or
                            (ii) 5 percent of the revenues earned by 
                        the person's ultimate parent entity during the 
                        preceding 12-month period; or
                    (B) if the person who committed the violation has 
                unfair leverage, 5 percent of the revenues earned by 
                the person's ultimate parent entity during the 
                preceding 12-month period.
            (5) Rulemaking.--
                    (A) In general.--The Commission may promulgate in 
                accordance with section 553 of title 5, United States 
                Code, such rules as may be necessary to carry out this 
                Act, including the guidance required under subparagraph 
                (B), guidance regarding an exceptional market shock, or 
                additional characteristics that demonstrate unfair 
                leverage.
                    (B) Required guidance.--Not later than 180 days 
                after the date of enactment of this Act, the Commission 
                shall promulgate regulations regarding violations of 
                this Act, which shall include guidelines on what 
                constitutes a market, an unconscionably excessive price 
                for a good or service, and an excessive price for a 
                good or service.
            (6) Effect on other laws.--Nothing in this section shall be 
        construed in any way to limit the authority of the Commission 
        under any other provision of law.
    (g) Enforcement by State Attorneys General.--
            (1) In general.--If the attorney general of a State, or 
        another official or agency designated by a State, has reason to 
        believe that any person has violated or is violating this 
        section, the attorney general, official, or agency of the 
        State, in addition to any authority it may have to bring an 
        action in State court under its laws, may bring a civil action 
        in any appropriate United States district court or in any other 
        court of competent jurisdiction, including a State court, to--
                    (A) enjoin any further such violation by such 
                person;
                    (B) enforce compliance with this section;
                    (C) obtain a permanent, temporary, or preliminary 
                injunction;
                    (D) obtain civil penalties;
                    (E) obtain damages, restitution, or other 
                compensation on behalf of residents of the State; or
                    (F) obtain any other appropriate equitable relief.
            (2) Notice.--Before filing an action under paragraph (1), 
        the attorney general, official, or agency of the State involved 
        shall provide to the Commission a written notice of such action 
        and a copy of the complaint for such action. If the attorney 
        general, official, or agency determines that it is not feasible 
        to provide the notice described in this paragraph before the 
        filing of the action, the attorney general, official, or agency 
        shall provide written notice of the action and a copy of the 
        complaint to the Commission immediately upon the filing of the 
        action.
            (3) Limitation on state action while federal action is 
        pending.--If the Commission has instituted a civil action for a 
        violation of this section, no State attorney general, or 
        official or agency of a State, may bring an action under this 
        paragraph during the pendency of that action against any 
        defendant named in the complaint of the Commission for any 
        violation of this section alleged in the complaint.
            (4) Relationship with state-law claims.--If the attorney 
        general of a State has authority to bring an action under State 
        law directed at acts or practices that also violate this 
        section, the attorney general may assert the State-law claim 
        and a claim under this section in the same civil action.
    (h) Savings Clause.--Nothing in this section shall preempt or 
otherwise affect any State or local law.

SEC. 4. DISCLOSURES IN SEC FILINGS.

    (a) Definitions.--In this section:
            (1) Covered issuer.--The term ``covered issuer'' means an 
        issuer that--
                    (A) has a covered quarter; and
                    (B) in the quarter following the covered quarter 
                described in subparagraph (A), is required to submit 
                Form 10-Q or Form 10-K.
            (2) Covered quarter.--The term ``covered quarter'' means a 
        quarter during which there is an exceptional market shock.
            (3) Form 10-k.--The term ``Form 10-K'' means the form 
        described in section 249.310 of title 17, Code of Federal 
        Regulations, or any successor regulation.
            (4) Form 10-q.--The term ``Form 10-Q'' means the form 
        described in section 240.15d-13 of title 17, Code of Federal 
        Regulations, or any successor regulation.
            (5) Issuer.--The term ``issuer'' has the meaning given the 
        term in section 3(a) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)).
    (b) Inclusion in Filing.--Each covered issuer, in each Form 10-K or 
Form 10-Q that the covered issuer is required to file in a quarter 
following a covered quarter, shall include in the filing the following 
information with respect to that covered quarter, as compared with the 
quarter preceding that covered quarter:
            (1) The percentage change in the volume of goods or 
        services sold, and the percentage change in the average sales 
        price of those goods or services, which shall be broken down by 
        material product categories, when relevant, and presented in a 
        tabular format.
            (2) The gross margins of the covered issuer, which shall be 
        broken down by material product categories, when relevant, and 
        presented in a tabular format.
            (3) Presented in tabular format, the share of the increase 
        in revenue of the covered issuer that is attributable to--
                    (A) a change in the cost of goods or services sold 
                by the covered issuer; and
                    (B) a change in the volume of goods or services 
                sold by the covered issuer.
            (4) The percentage change in the costs of the covered 
        issuer, which shall be broken down by category and presented in 
        tabular format.
            (5) In dollars, the change in the costs of the covered 
        issuer and the revenue of the covered issuer, which shall be 
        presented in tabular format.
            (6) A detailed narrative disclosure of the pricing strategy 
        of the covered issuer, which shall include--
                    (A) an explanation for any increase in the gross 
                margins of material product categories, including all 
                material causes for such an increase, an explanation of 
                how each such material cause affected such an increase, 
                and a description of the relative importance of each 
                such material cause with respect to such an increase;
                    (B) an explanation for the decisions made by the 
                covered issuer with respect to the prices of goods or 
                services sold by the covered issuer;
                    (C) if the covered issuer increased prices at a 
                rate that was greater than the rate at which the costs 
                incurred by the covered issuer increased, the rationale 
                and objectives for increasing prices in such a manner; 
                and
                    (D) a description of conditions under which the 
                covered issuer plans to modify pricing after the date 
                on which the covered issuer submits the filing.
    (c) Regulations.--Not later than 60 days after the date of 
enactment of this Act, the Securities and Exchange Commission shall 
issue final regulations, or amend existing regulations of the 
Commission, to carry out this section.
    (d) Effective Date.--This section shall take effect on the date on 
which the Securities and Exchange Commission issues final regulations 
under subsection (c) or completes the amendments required under that 
subsection, as applicable.

SEC. 5. FUNDING.

    In addition to amounts otherwise available, there is appropriated 
to the Commission for fiscal year 2022, out of any money in the 
Treasury not otherwise appropriated, $1,000,000,000, for carrying out 
work of the Commission.
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