New Act Sets 10% Price Cap on Essential Goods During Emergencies, Cracks Down on Hoarding

When a major disaster hits—think hurricanes, pandemics, or huge supply chain snags—the last thing anyone wants is to see the price of bottled water, gasoline, or baby formula suddenly triple. The Cracking Down on Price Gouging Act is designed to stop exactly that by significantly strengthening the federal government’s ability to police prices on essential items during declared emergencies.

The New 10% Rule: A Clear Line in the Sand

This bill doesn’t just vaguely tell sellers to “be nice.” It amends the Defense Production Act of 1950 to create a clear, quantifiable standard for illegal price gouging. Specifically, it prohibits the sale of a critical good at a price that “grossly exceeds prevailing market prices” or is “unfairly excessive.” The key change here is the introduction of the 10% Rule. If a seller raises the price of a critical good by 10% or more compared to the price right before the shortage started, that increase is automatically considered a “gross disparity” and therefore illegal price gouging (Sec. 2).

If you’re running a small construction business after a flood, this means the local hardware store can’t suddenly charge you double for plywood. For a family stocking up on groceries during a disease outbreak, the supermarket can’t hike the cost of milk and bread by 50%. The bill is focused on protecting consumers when they are most vulnerable and need access to necessities. It also clarifies that even a price hike of less than 10% can still be considered unfairly excessive if it’s clearly out of line with pre-shortage costs (Sec. 2).

What Counts as a 'Critical Good'? (Spoiler: Almost Everything You Need)

The new rules apply to items defined as “critical goods.” This definition is intentionally broad and covers nearly everything essential for daily life. It includes any food item, medical or emergency supplies (think masks, bandages, batteries), energy resources (gas, electricity, heating oil), and any other item or service needed to keep the public “healthy, safe, or well-off” (Sec. 2). This means the protections extend beyond just physical goods to things like necessary services—maybe urgent plumbing repairs or essential transportation.

The 'Legitimate Cost' Exception: Protecting Honest Sellers

Nobody wants to punish a business owner who is genuinely facing higher costs. The bill includes an important safety valve: a price increase is not considered unfairly excessive if the seller can prove the higher price is due to a legitimate business need or extra costs they couldn't control (Sec. 2). For example, if a trucking company has to pay triple the usual rate for fuel to deliver goods to a disaster zone, they can pass that cost along. The burden of proof, however, is on the seller to demonstrate those legitimate, uncontrollable increases.

High Stakes for Violators

For any individual or company that willfully violates these new anti-gouging rules, the penalties are severe and designed to deter opportunistic behavior. The fine is set as the greater of either $20,000 or 300% of the total revenue made from the illegal sales (Sec. 2). This high penalty structure is meant to ensure that price gouging is never profitable, making it a serious deterrent for anyone considering exploiting a crisis. While this is great news for consumers, businesses need to be meticulous about tracking their costs during a shortage, as the penalty for miscalculation or poor record-keeping could be financially devastating.