[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7736 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 7736
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 12, 2022
Ms. Schakowsky (for herself, Mr. Nadler, Mr. Cicilline, Mrs. Demings,
Ms. Porter, Mr. Khanna, Mr. Rush, and Mr. Bowman) introduced the
following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committee on Financial Services, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
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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