As rising tariffs threaten to push inflation higher this summer, a group of Democratic legislators, led by Senator Elizabeth Warren of Massachusetts, has introduced a bill designed to combat price gouging by major corporations.
The Price Gouging Prevention Act of 2025, unveiled Thursday by Warren, Senators Jan Schakowsky (D-IL), Tammy Baldwin (D-WI), and Representative Chris Deluzio (D-PA), seeks to outlaw price gouging and empower the Federal Trade Commission (FTC) and state attorneys general to pursue legal action against companies suspected of abusing their market power. The proposed law arrives on the heels of the latest Consumer Price Index, which revealed a concerning resurgence of inflation, exacerbated by escalating tariff impositions. The first sign was subtle, a slight increase on the usual grocery bill, but it quickly compounded.
Senator Warren contends that large corporations have historically exploited market disruptions, such as inflation and supply chain bottlenecks, as pretexts for excessive price hikes. However, she argues that President Trump’s ongoing trade war is now the primary driver.
“Donald Trump’s reckless tariff policies are giving companies cover to squeeze families and raise prices more than necessary. My bill is an opportunity for Congress to stand up for families by cracking down on price gouging and fighting back against corporate abuse,” Warren declared in a public statement. The legislative text explicitly cites “abrupt trade policies” and “exceptional market shock” as critical factors to be considered when analyzing price increases.
A previous version of the bill, The Price Gouging Prevention Act of 2024, introduced last year but ultimatley did not pass, did not specifically reference trade policies. That bill, co-sponsored by Warren and then-Senator Bob Casey (D-PA), was introduced in February 2024. The bill ultimately failed to pass after Casey lost his Senate seat in the 2024 election to Republican David McCormick.
The 2025 legislation stipulates that companies with annual revenues exceeding $100 million must disclose in their filings with the Securities and Exchange Commission (SEC) any pricing adjustments that surpass the average price from the 120 days before the reporting period. These disclosures must include comprehensive details on product costs and profit margins. Businesses with revenues below $100 million would be shielded from litigation if they can demonstrate legitimate cost increases.
Furthermore, the bill proposes allocating an additional $1 billion in funding to the FTC to bolster its enforcement capabilities. Senator Baldwin echoed Warren’s sentiments, stating, “The biggest corporations in our country jack up the cost of everyday household items, take in record profits, and give their executives huge bonuses , all on the backs of hard-working Wisconsin families. Donald Trump claimed he would lower prices , so far, he has done just the opposite and is even opening the door to more price gouging. Our bill will finally crack down on corporate greed and help stop those big companies at the top of the food chain from sticking families with exorbitant costs,” she stated.
During recent second-quarter earnings calls, major retailers such as Costco, Best Buy, and Newell Brands all identified tariffs as a contributing factor to price increases.
Representative Deluzio attributed price increases to “out-of-control” corporate power. “Prices are still too high, and inflation is still pounding folks,” Deluzio asserted. “Especially now, we need to rein in monopolists and other huge corporations with the power to price-gouge the American people,” he added.
The AFL-CIO and United Steelworkers have voiced their support for the bill, characterizing it as long overdue.
However, price gouging legislation has faced criticism from both sides of the political spectrum. Jason Furman, an economic advisor to President Obama, expressed skepticism regarding a similar plan proposed during Kamala Harris’s presidential campaign. He said:
“This is not sensible policy, and I think the biggest hope is that it ends up being a lot of rhetoric and no reality. There’s no upside here, and there is some downside.”
This viewpoint, published in the New York Times, highlights the economic complexities surrounding price gouging regulation. Furman argued that such measures often distort market signals and can ultimately harm consumers by limiting supply.
During a contentious interview last year, Warren countered critics, noting that numerous states, including Florida and Texas, already have price gouging laws that have been effectively used, primarily in response to natural disasters and acute shortages. “Pricing gouging laws are not price controls. Price gouging laws are there to say that sometimes markets go off the rails and when they do we need some ways to get them back on the rails. We need some curbs on that behavior,” Warren stated during an interview. The key distinction, she argued, lies in targeting unjustified price increases during times of crisis, rather than setting artificial price ceilings that could stifle competition and innovation. The debate hinges on defining what constitutes an “unjustified” price increase in the context of fluctuating costs and market dynamics.
Warren’s long-standing focus on this issue is evidenced by a letter she and Casey sent to Kroger CEO Rodney McMullen last August, questioning the grocer’s implementation of electronic shelf labels, arguing that this technology could facilitate easier price hikes on high-demand items. The letter emphasized the importance of transparency and fair pricing practices, particularly in essential goods markets.
In another instance, last November, Warren and Representative Adam Schiff (D-Calif.) jointly penned a letter to the FTC and the Department of Agriculture, urging them to investigate allegations that Albertsons and its subsidiaries Safeway and Vons were mislabeling items sold by weight, including produce, meat, and baked goods, and unlawfully charging customers prices higher than their lowest advertised or posted price. These actions underscore Warren’s commitment to holding corporations accountable for deceptive pricing practices.
A month earlier, Safeway, Albertons, and Von reached a settlement, agreeing to pay nearly $4 million to resolve allegations of price overcharges and false weight advertising in California.
The list of co-sponsors demonstrates wide support within the democratic party for this legislation:
- Senators Richard Blumenthal (D-Conn.)
- John Fetterman (D-Pa.)
- Andy Kim (D-N.J.)
- Ed Markey (D-Mass.)
- Jeff Merkley (D-Ore.)
- Bernie Sanders (I-Vt.)
- Elissa Slotkin (D-Mich.)
- Sheldon Whitehouse (D-R.I.)
- Representatives Angie Craig (D-Minn.)
- Maggie Goodlander (D-N.H.)
- Hank Johnson (D-Ga.)
- Ro Khanna (D-Calif.)
- Eleanor Holmes Norton (D-D.C.)
- Jerry Nadler (D-NY)
- Mary Gay Scanlon (D-Pa.)
- Rashida Tlaib (D-Mich.)
- Paul Tonko (D-N.).
Reactions to the bill on social media have been mixed, with some users on X.com praising Warren for addressing corporate greed, while others on Facebook expressed concerns about potential unintended consequences, such as reduced product availability. One Instagram comment read, “I hope this actually works and isn’t just political theater.” These varied perspectives reflect the complex challenges of regulating prices in a dynamic economy.
Ultimately, the success of the Price Gouging Prevention Act of 2025 will depend on its ability to strike a balance between protecting consumers from unfair pricing practices and avoiding unintended distortions in the market. The proposed legislation is anticipated to face rigorous debate in Congress, as lawmakers grapple with the economic and political ramifications of addressing price gouging amid ongoing trade tensions and inflationary pressures. It’s importnat to note that a similar bill failed to pass last year.
