New Act Targets Price Gouging During Disasters: $1B for FTC Enforcement and Mandatory Corporate Price Disclosures

The Price Gouging Prevention Act of 2025 is aiming to stop companies from hiking prices excessively during emergencies—what the bill calls an “exceptional market shock.” Think natural disasters, major power outages, or public health crises. Essentially, this bill makes it illegal to sell goods or services at a “grossly excessive price” when the chips are down.

The Rules of the Emergency Road

For most everyday businesses, this bill won't change much. Companies whose ultimate parent entity made less than $100 million in U.S. revenue last year are generally exempt from the price gouging prohibitions. However, even these smaller players must be able to prove that any price increase they made was strictly due to higher costs they couldn’t control, like shipping or sourcing. If you’re a small local distributor, you need to keep good records of your receipts if a shock hits.

The Big Fish and the Burden of Proof

This law really takes aim at major corporations. If a company has what the bill calls “unfair leverage”—which generally means earning over $1 billion in U.S. revenue or controlling a significant market share (40% as a seller, 30% as a buyer)—they face much stricter scrutiny. During a market shock, if these giant firms raise prices significantly above their average from the previous 120 days, they are presumed to be price gouging. That’s a massive shift in the burden of proof.

To fight this presumption, a large company must show “clear and convincing evidence” that the price hike was strictly due to uncontrollable cost increases. This is a very high legal bar. For instance, if a major food producer raises the price of canned goods after a hurricane, they can’t just say, “Our costs went up.” They have to prove with detailed records that the entire increase was only because their shipping costs doubled due to blocked roads. If they raised prices by 15% but their costs only went up 10%, they could be in trouble.

The Enforcement Squad Gets a Boost

The Federal Trade Commission (FTC) and State Attorneys General (AGs) are getting serious muscle here. Violating this rule is considered an unfair practice under the FTC Act, meaning the FTC can hit violators with significant civil penalties. If a company is found guilty and has “unfair leverage,” the penalty is 5 percent of their ultimate parent company’s annual revenue. For a multi-billion dollar corporation, that fine could be huge. To fund this increased workload, the bill sets aside an extra $1 billion for the FTC, available until 2033.

The New Corporate Transparency Mandate

Beyond the penalties, the bill introduces a major new transparency requirement for publicly traded companies. After a market shock, any “covered issuer” filing their quarterly (10Q) or annual (10K) report with the SEC must include a detailed breakdown of their pricing strategy. This isn’t just a simple report; they must disclose in tables: the percentage change in sales volume versus price, gross margins broken down by product line, and what portion of their revenue increase came from raising prices versus selling more units.

Crucially, if a company’s gross margins went up, they must provide a detailed written explanation listing all the main reasons for the increase and how important each reason was. If they raised prices faster than their own costs went up, they have to explain their goal for doing that. This means investors, regulators, and the public will get an unprecedented look at how major corporations adjust their pricing during times of crisis. For the average person, this transparency could eventually lead to better accountability, but for compliance teams at large firms, this is a massive new reporting headache.