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| Wilson Introduces Anti-Price Gouging Bill |
May 01, 2006 |
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Works for Broader Policy to Protect American Consumers
Albuquerque – Congresswoman Heather Wilson today introduced strong new legislation to hold companies or individuals accountable for fuel price gouging, and urged House leadership to fast track a vote on the effort because of its importance to Americans.
Wilson, a member of the House Energy and Commerce Committee, has led the House efforts to protect consumers from price gouging and last month wrote a letter to Speaker Hastert about the issue. The Wilson bill introduced today would prohibit price gouging – at any time, not limited to emergencies – in the market for gasolines, diesel, crude oil, home heating oil and biofuels. The legislation would expand and build on a previous bill she offered.
“The government doesn’t set prices, but we do have a responsibility to prohibit price gouging and unfair manipulation of the markets,” Wilson said. “Opportunists should not be able to reap ill-gotten windfall profits on the backs of America’s families.”
The bill would set stiff criminal and civil penalties for price-gouging and allow investigations by the Federal Trade Commission, U.S. Attorneys or state attorneys general. Under the provisions, the FTC would consider public comment and define gouging within six months of the enactment of the Act.
The substance of an anti-price gouging amendment authored by Wilson already passed the House in October 2005 as part of the Gasoline for America’s Security (GAS) Act of 2005. That price gouging policy would create stiff penalties for violations during times of crisis. Legisltion introduced today would create a broader anti-gouging policy.
Key Provisions of the Wilson legislation
Prohibits price gouging—at any time—in the market for gasoline, diesel fuel, crude oil, home heating oil, and biofuels.
Directs the FTC to define by rule the terms “price gouging”, “wholesale sale”, and “retail sale” for the purposes of the Act. The existing state statutes in this area have vastly different definitions and interpretations. Under a rulemaking, the FTC would have the benefit of receiving, and the obligation to consider, comment from interested parties on the definition of price gouging. The Act directs the FTC to define price gouging within 6 months of enactment.
Requires the FTC to define “price gouging” consistent with the traditional unfairness principles under Section 5(n) of the FTC Act.
Provides for strong civil enforcement by the FTC AND by States’ Attorneys General, and criminal enforcement by the U.S. Attorney General and the Department of Justice.
Provide for civil penalties for price gouging. For “wholesale sale” violations, the penalties are 3 times the ill-gotten gains of the seller, plus an amount not to exceed $3,000,000, per day of a continuing violation. For “retail sale” violations, the penalties are simply 3 times the ill-gotten gains of the seller.
Any civil penalty imposed under the Act shall be deposited into any account or fund (established under the laws of the State) used for paying compensation to consumers for violation of State consumer protection laws. If no such State law exists, the penalty shall be deposited into the general fund of the State treasury.
Furthermore, the Act provides for criminal penalties. “Whole sale” violations will be punishable by a fine of no more than $150,000,000, imprisonment for not more than 2 years, OR both. “Retail sale” violations will be punishable by a fine of no more than $2,000,000, imprisonment for not more than 2 years, OR both.
Wilson Letter to Speaker Hastert on Gas Gouging
April 25, 2006
Mr. Dennis Hastert
Speaker of the House
US House of Representatives
Capitol 232
Washington, D.C. 20515
Dear Speaker Hastert,
Average gas prices in the New Mexico have risen to upwards of $3.10 a gallon, nationally averages have teetered on the $3.00 mark. Nationally, a month ago average prices were $2.47, and a year ago that price was $2.22.
Some states, like New Mexico, do not have a law against price gouging. A federal law to address price gouging is needed.
The Federal Trade Commission authority to investigate price gouging is limited. So let’s expand it. While this legislation passed as part of the GAS Act, I would ask that HR 3782, the Gasoline Price Gouging Act of 2005, be brought to the floor for a vote without being tied to larger energy legislation.
Over the recent district work period, all of us talked to small business owners and constituents who gave us new ideas that will reduce our dependence on foreign oil.
I would like to request that your office bring members together to assess price gouging and develop a short term and long term agenda to make America energy independent. We should move this agenda forward now.
I look forward to working with your office to pass a stand alone bill to address price gouging.
Sincerely,
Heather Wilson
Member of Congress
cc: Majority Leader John Boehner
Majority Whip Roy Blunt
Chairman Barton
HW:rc
Background of Wilson’s Previous Efforts on Price Gouging
Wilson and Rep. Sherrod Brown, D-OH, initially introduced a bipartisan price gouging bill September 14, 2005, to give the Federal Trade Commission the authority to investigate price gouging by individuals or companies. That proposal called for stiff civil penalties of $11,000 per incident of price-gouging after an area has been declared a disaster area.
Wilson later introduced the substance of that bill as an amendment, and on October 7, 2005, the House passed (212-210) the Gasoline for America’s Security (GAS) Act of 2005, a bill promoting domestic refining capacity, with Wilson’s anti-gouging provisions.
Federal legislation is needed, Wilson says, because only 23 states have anti-gouging laws on the books, and definitions vary widely. Without this bill, prosecution for price-gouging would continue to fall under state law unless it involved some form of collusion or other activity in violation of federal antitrust laws. Wilson was concerned that current law does not adequately address price gouging that does not rise to the level of antitrust prohibitions.
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