At FTC Oversight Hearing, Cantwell Previews Legislation to Crack Down on COVID-19 Price Gouging and Fake Goods
FTC Chair Simons welcomes Cantwell initiative: "We would vigorously support and enforce legislation if Congress passed a law on price gouging.”
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA), Ranking Member of the Senate Committee on Commerce, Science, and Transportation, announced plans to introduce legislation to make it a federal crime to gouge consumers during emergencies like the ongoing COVID-19 pandemic. Cantwell's legislation would also crack down on sellers of fake goods, making clear that it is illegal to peddle items like defective masks or fake COVID-19 cures.
“My view of the FTC is simple: you should be doing everything in your power to help Americans during this time of crisis,” Senator Cantwell said. “Our nation continues to reel from one of the worst health emergencies and one of the biggest economic crises we've ever faced. The COVID-19 pandemic has attracted bad actors and scam artists, including those who take advantage of people's fear and dire circumstances. While many of the attorneys general have gone after these profiteers, I believe the FTC is holding back. You could be doing more. We must move beyond warnings and threats in response to these unconscionable scams. We must see the FTC exercising real enforcement with real consequences to protect consumers and families when they are most vulnerable.”
COVID-19 has brought price gouging and its long-term impacts to the forefront for consumers. In March, the Seattle Times reported that Internet sellers and second-hand markets were selling $7 hand sanitizers for as much as $150. Around the world, N95 masks have been resold at extremely high prices as well. The fact that all 50 states have price gouging hotlines and ready-made report forms shows how prevalent this issue is across the nation. Extreme weather and other disasters can also lead to price gouging. For example, in the past week Florida expanded its price gouging hotlines to cover storm necessities as Hurricane Isaias approached.
Senator Cantwell said, “I plan to introduce, in the coming days, federal legislation to do two things: to move both on a price gouging definition to make sure the law is clear that consumers can be protected in this area, and to enforce civil penalties for deceptive COVID scams. It is time for us to act on these important pieces of legislation. It is time for us to protect our consumers from these very important issues during the time of crisis. People need help and support. They don't need deception and schemes, and we need an FTC that will be more aggressive.”
FTC Chairman Simons agreed, saying, “Senator, we agree that price gouging is a very serious problem, especially for PPE and the like. We would vigorously support and enforce legislation if Congress passed a law on price gouging.”
Commissioner Slaughter also concurred, saying, “We would really benefit from clear [price gouging] legislation from Congress, but very much share your view that this is a high priority and something that we can see the real life effects of for American people every day.”
Senator Cantwell has been a long-time advocate for exposing fraud and manipulation that is hurting American consumers. She took a leading role in the congressional investigations that exposed the role Enron played in jacking up West Coast energy prices. Using the lessons learned from those manipulative schemes, Cantwell authored legislation that made it a crime to manipulate electricity or natural gas markets, which was enacted into law as part of the 2005 Energy Bill. That legislation also contained a Cantwell provision to prevent a bankruptcy court from forcing Snohomish Public Utility District (PUD) and its customers to fork over another $122 million to Enron.
Cantwell additionally authored legislation making it illegal to manipulate wholesale oil markets, which was included in the 2007 Energy Bill. Unfortunately, additional Cantwell provisions prohibiting price gouging were dropped in the final conference negotiations even though the measure had passed the Senate with bipartisan support. In June 2008, Cantwell chaired a Senate Commerce Committee hearing investigating whether market manipulation is behind today’s skyrocketing oil and gas prices. In 2009, Cantwell fought to ensure that the Dodd-Frank financial reform law included her language allowing the Commodity Futures Trading Commission (CFTC) to more effectively prosecute and deter Enron-style manipulation of the commodity futures and derivatives market prices.
Video of Senator Cantwell’s opening statement can be found HERE and audio is HERE.
Video of Senator Cantwell’s Q&A with witnesses can be found HERE and audio is HERE.
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