President Vows Crackdown on Unfair Pricing Practices Contributing to High Cost of Living
WASHINGTON, D.C. – In a forceful move signaling the administration’s growing frustration with stubbornly high consumer costs, President Joe Biden announced on Tuesday the formation of a new federal strike force explicitly tasked with combating what he termed “unfair and illegal corporate pricing practices” that are keeping the cost of living elevated for American families.
The new task force, jointly led by the Federal Trade Commission (FTC) and the Department of Justice (DOJ), represents an escalation in Biden’s multi-year campaign against anti-competitive business behaviors that his economic advisers say are a key culprit behind the public’s perception of persistent high inflation and economic struggle.
“For too long, powerful corporations have been able to fatten their profit margins by unfairly jacking up prices on American consumers, even when their own costs have gone down,” Biden declared at the White House event formally unveiling the initiative. “With this new strike force, we’re putting the corporate profiteers and price gougers on notice. Those days of unchecked monopoly power are over.”
The intensified war on pricing by the administration comes at a pivotal juncture, just months before Biden is expected to officially launch his 2024 re-election campaign. Despite a robustly recovering job market, low unemployment levels, and steadily decelerating inflation rates, voter sentiments continue to sour on the economy – a vulnerability that jeopardizes Biden’s political future and that of his Democratic Party.
At the heart of Biden’s discontent is a puzzle that has bedeviled his economic team: Why have measures of consumer confidence and public perceptions on the state of the economy persistently lagged behind many of the quantifiable metrics? The explanation, senior officials insist, lies substantially in the degree to which large corporations in consolidated industries have flexed their market power through pricing strategies that actively increase costs for households.
“Over the past year, supply chains have normalized and inflationary pressures have objectively eased significantly,” said Lael Brainard, director of the White House National Economic Council, previewing the strike force announcement on Monday. “Yet some major corporations have simply refused to pass those cost savings along to consumers through lower prices. The President is fed up with these unfair practices artificially raising costs, and he’s directing us to take action.”
Precisely how the new task force will operate remains somewhat opaque, with authorities acknowledging that a variety of existing statutes at different agencies could potentially be leveraged, depending on the specific situations. But at its core, the initiative represents an effort to more closely monitor and analyze corporate pricing data across major sectors spanning consumer goods, transportation, agriculture, and beyond.
When potential violations or anti-competitive acts are detected, the FTC and DOJ – as the government’s foremost antitrust enforcement bodies – would coordinate to open investigations, file lawsuits, levy fines, block mergers, or impose other penalties as necessary.
“Some of the world’s most powerful corporations have been able to consolidate their market dominance in ways that harm American families,” said Assistant Attorney General Jonathan Kanter, who will co-chair the new task force alongside FTC Chair Lina Khan. “This strike force will allow us to improve the lives of everyday people by confronting these corporate giants and the unfair pricing tactics they’ve been able to get away with for far too long.”
The unveiling of the task force follows years of criticism that the Biden administration has not done enough to tangibly address the economic frustrations of the electorate, despite claiming to make it a top priority. While taking credit for the recovery from pandemic-driven economic turmoil, Biden has simultaneously blasted companies for “greed” that he claims is keeping consumer costs artificially inflated.
Republicans have pushed back forcefully, accusing Biden of trying to deflect blame for the inflation crisis while waging a “war on business” through regulatory overreach that will ultimately further weaken the economy. But the administration has sharpened its rhetoric in recent months, suggesting political considerations may be emboldening Biden to more assertively frame corporations as antagonists exploiting market vulnerabilities.
“President Biden ran on a promise of promoting competition and standing up to corporate power, and so far he hasn’t delivered on that in a way most Americans have felt in their pocketbooks and daily lives,” said Lindsay Owens, executive director of the Groundwork Collaborative progressive think tank. “This strike force seems like an attempt to show some muscle in reining in price gouging and dominance across industries.”
Whether the effort yields substantive actions and impacts remains to be seen. But the strike force’s birth follows months of the White House repeatedly calling out certain corporate pricing behaviors it deems problematic, like “shrinkflation” (decreasing product sizes while maintaining prices) and alleged “price gouging” amid excess profitability even as supply chain costs have normalized.
American consumers have certainly experienced stingingly high price hikes over the past two years across basics like food, housing, and energy as the pandemic’s economic shocks fueled the worst inflation outbreak since the 1970s and 80s. Inflation rates have cooled steadily over the past several months, yet many household costs have remained elevated.
Companies tend to defend their pricing actions as both lawful and unavoidable to cover rising labor, shipping, borrowing, and input costs. They also argue that market competition prevents excessive price gouging.
But the White House dismisses the idea that markets have functioned competitively across many major industries. Instead, officials insist that overly consolidated corporate power in key sectors – driven by years of merger frenzy – has enabled coordinated pricing strategies that collectively enrich shareholders at the public’s expense.
The editorial board of the Wall Street Journal, a longstanding critic of the administration’s competition agenda, derided the strike force concept in a scathing op-ed on Tuesday. “Mr. Biden wants to shift the blame for inflation away from the Federal Reserve’s monetary policies and profligate federal spending and on to business pricing strategies,” the board wrote.
At Tuesday’s White House meeting, several policy actions across various agencies that the administration says will help bolster price competition were announced:
- The Consumer Financial Protection Bureau finalized a new rule that caps late fees on credit card payments.
- New Agriculture Department rules aimed at preventing discrimination against farmers were unveiled.
- The Department of Health and Human Services introduced initiatives to increase transparency around medical costs.
- And the Federal Maritime Commission promised tough enforcement around anti-competitive behavior among global shipping companies.
Delivering remarks at the event, Biden framed his economic vision in populist terms, promising an all-out fight to defend middle-class interests against concentrated corporate forces. “I know whose side I’m on: The American consumer’s. It’s as simple as that,” the President declared.
With this new strike force and the full force of the federal government, we’re saying enough is enough. American families should no longer have to struggle under crippling costs while companies rake in record profits through unfair pricing scams.”
Polls show perceptions of Biden’s economic leadership remain deeply polarized, with Democrats approving and Republicans scornful. Tuesday’s aggressive escalation seemed tailored to both shore up the president’s own political base while aiming to sway independents discontented with the prevailing economic conditions.
New surveys released just this week do show improving consumer sentiment in some areas, offering the White House some cautious optimism that mounting job growth, rebounding real wages, and decelerating inflation could gain more recognition in 2024 if current trends hold.
Whether the administration’s amplified anti-corporate rhetoric and its latest “strike force” initiative significantly reshape voter sentiments remains an open question heading into an election year that could prove unforgiving if the public’s cost-of-living anxieties persist.
Biden appears ready to embrace that clash head-on. Speaking to reporters, the President delivered an emphatic vow: “You’re going to see me taking the fight directly to companies that are price gouging families left and right. I’m not holding anything back.”
