Disaster and Emergency Pricing Abuse Prevention Act

II 116TH CONGRESS 2D SESSION S. 3576 To clarify that the Federal Trade Commission Act prohibits excessive and unjustified price increases in the sale of certain products and services when an emergency or disaster results in abnormal disruptions of the market, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 24, 2020 Ms. KLOBUCHAR (for herself, Mr. BLUMENTHAL, Ms. HIRONO, and Ms. COR- TEZ MASTO) introduced the following bill; which was read twice and re- ferred to the Committee on Commerce, Science, and Transportation A BILL To clarify that the Federal Trade Commission Act prohibits excessive and unjustified price increases in the sale of certain products and services when an emergency or dis- aster results in abnormal disruptions of the market, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Disaster and Emer- 4 gency Pricing Abuse Prevention Act’’. 5 SEC. 2. DEFINITIONS. 6 In this section: 7 VerDate Sep 11 2014 01:45 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3576.IS S3576 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 3576 IS (a) COMMISSION.—The term ‘‘Commission’’ means 1 the Federal Trade Commission. 2 (b) ESSENTIAL GOODS OR SERVICES.—The term ‘‘es- 3 sential goods or services’’ means goods or services that 4 may be used to preserve, protect, or sustain the health, 5 safety, or welfare of members of the public from potential 6 harms resulting from a natural disaster, a pandemic, or 7 the circumstances giving rise to a state of emergency. 8 (c) NATURAL DISASTER.—The term ‘‘natural dis- 9 aster’’ means a disaster, catastrophe, or emergency, in- 10 cluding flood, fire, earthquake, storm, or other serious act 11 of nature, which threatens the health, safety, or welfare 12 of the public. 13 (d) PERSON.—The term ‘‘person’’ means an indi- 14 vidual or entity, its directors, officers, employees, agents, 15 representatives, successors, and assigns, including any en- 16 tity the person controls, and the respective directors, offi- 17 cers, employees, agents, representatives, successors, and 18 assigns of each. 19 (e) STATE OF EMERGENCY.—The term ‘‘state of 20 emergency’’ means any state of emergency or disaster de- 21 clared by the President or by the government of any State 22 or territory of the United States. 23 (f) UNCONSCIONABLY EXCESSIVE PRICE.—The term 24 ‘‘unconscionably excessive price’’ means a price that rep- 25 VerDate Sep 11 2014 01:45 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3576.IS S3576 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 3576 IS resents a gross disparity between the price of the essential 1 good or service that is the subject of an offer or trans- 2 action during, or in anticipation of, a natural disaster, 3 pandemic, or state of emergency and the average price at 4 which such essential good or service was offered in the 5 ordinary course of business prior to any public anticipa- 6 tion of a natural disaster, pandemic, or state of emer- 7 gency. 8 SEC. 3. FEDERAL TRADE COMMISSION ENFORCEMENT 9 AGAINST PRICE GOUGING. 10 (a) VIOLATION.—Selling, or offering for sale, essen- 11 tial goods and services, in or affecting commerce, at an 12 unconscionably excessive price during, or in anticipation 13 of, a natural disaster, pandemic, or state of emergency, 14 shall constitute an unfair or deceptive act or practice 15 under section 5(a) of the Federal Trade Commission Act 16 (15 U.S.C. 45(a)). 17 (b) CIVIL ACTION.— 18 (1) IN GENERAL.—If the Commission has rea- 19 son to believe that there has been a violation of sec- 20 tion 5(a) of the Federal Trade Commission Act (15 21 U.S.C. 45(a)) under subsection (a) of this section, 22 the Commission may commence a civil action to re- 23 cover a civil penalty and seek other appropriate re- 24 lief in a district court of the United States. 25 VerDate Sep 11 2014 01:45 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3576.IS S3576 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 3576 IS (2) PRESUMPTION.—In a civil action under 1 paragraph (1), the price of an essential good or serv- 2 ice shall be presumed to be an unconscionably exces- 3 sive price if the price charged or offered by the de- 4 fendant during, or in anticipation of, a natural dis- 5 aster, pandemic, or state of emergency, exceeded by 6 20 percent the greater of— 7 (A) the average price charged by the de- 8 fendant for the essential good or service during 9 the preceding 60 days before the public could 10 reasonably have anticipated the natural dis- 11 aster, pandemic, or state of emergency; or 12 (B) the average price at which buyers 13 could obtain such good or service or similar 14 goods or services in the geographic area during 15 the 60-day period before the date on which the 16 public could reasonably have anticipated the 17 natural disaster, pandemic, or state of emer- 18 gency, 19 unless the price charged by the defendant is attrib- 20 utable to price increases in related input markets or 21 to additional expenses not within the control of the 22 defendant that increased the defendant’s costs to 23 furnish the essential goods or services. 24 VerDate Sep 11 2014 01:45 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3576.IS S3576 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 3576 IS (3) CIVIL PENALTY.—In an action under para- 1 graph (1), any person that has been found liable for 2 a violation of section 5(a) of the Federal Trade 3 Commission Act (15 U.S.C. 45(a)) under subsection 4 (a) of this section shall be subject to a civil penalty 5 of an amount no greater than $10,000 per violation. 6 (4) RULE OF CONSTRUCTION.—The civil pen- 7 alty provided in this subsection is in addition to, and 8 not in lieu of, any other remedies provided by Fed- 9 eral law, including injunctive relief under section 10 13(b) of the Federal Trade Commission Act (15 11 U.S.C. 53(b)). Nothing in this paragraph shall be 12 construed to affect any authority of the Commission 13 under any other provision of law. 14 SEC. 4. PRICE GOUGING HOTLINE. 15 The Commission shall establish a telephone hotline 16 and an online portal dedicated solely to receiving price 17 gouging complaints from the public, which shall be acti- 18 vated in anticipation of or during major disasters or states 19 of emergency and shall remain operational until 120 days 20 after the conclusion of such major disasters or states of 21 emergency. 22 SEC. 5. NO PREEMPTION OF STATE LAW. 23 Nothing in this Act preempts any State law. 24 Æ VerDate Sep 11 2014 01:45 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S3576.IS S3576 pamtmann on DSKBC07HB2PROD with BILLS