Congress targets price gouging—but vague rules may backfire on supply.
H.R. 4720 — Cracking Down on Price Gouging Act · Filed by Josh Riley (D-NY) · Introduced Jul 23, 2025 · Referred to committee
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What it does
This bill amends the Defense Production Act to prohibit 'price gouging' during declared shortages of critical goods—food, medicine, energy, and other essentials. It defines an 'unfairly excessive price' as one that jumps 10% or more above the pre-shortage baseline, and allows the President to designate materials as scarce. Violators face fines of up to 300% of revenue gained through the violation. The bill exempts price increases justified by legitimate business costs.
Why we flagged it
The bill's core mechanism is a price ceiling on essential goods during declared shortages, enforced through criminal penalties. It is a direct intervention in market pricing, not a tax or subsidy.
What the text implies
- The 10% presumptive threshold may not account for legitimate supply-chain cost increases (freight, labor, procurement), potentially forcing sellers to absorb losses and exit the market during crises.
- The definition of 'acute shortage' is extremely broad ('extreme industry consolidation' and 'any other similar exigent constraint'), giving the President wide discretion to trigger price controls.
The full analysis lists 4 implications of this text.
Who stands to gain
consumers during shortages; government (penalty revenue)