Wednesday, May 23, 2007

Congress Targets Gasoline Pricing in Antitrust/Consumer Protection Bills

With Memorial Day ushering in the summer vacation season, people are starting to plan long car trips and attempting to figure out how much more gasoline will cost them this year.

The answers will not be welcome, since the national average price of gasoline has risen nearly 40% since early February. The national average price of unleaded regular now stands at $3.21 per gallon.

Thus, it’s no wonder that terms like “price gouging”—and bills targeting runaway gas prices—are being tossed around in Congress.

In the past few weeks, Congress has taken up the following bills dealing with gasoline pricing:

Price gouging. Under the proposed "Federal Energy Price Protection Act of 2007," gouging in the sale of crude oil, gasoline, diesel fuel, home heating oil, or any biofuel would constitute an unfair or deceptive act or practice in violation of the FTC Act. The measure (H.R. 2335), introduced on May 15 by Rep. Heather Wilson (New Mexico), also provides for criminal enforcement by the Department of Justice.

FTC monitoring, investigations. Under legislation (S. 1381)proposed by Sen. Barbara Boxer (California) on May 14, the FTC would be required to monitor gasoline prices and conduct investigations if prices increase 20 percent or more for at least 7 days during any 3-month period . The FTC would be expected to report the results of investigations to Congress. If, as a result of the investigation, the FTC were to determine that the price increases in a particular state were the result of market manipulation, it would be required to take appropriate action in cooperation with the state attorney general. Three days before introducing S. 1381, Senator Boxer announced her hope that the Senate would give "prompt consideration" to another measure targeting high gas prices, the proposed "Petroleum Consumer Price Gouging Protection Act" (S. 1263)—a bipartisan measure that would ban gasoline price gouging.

“NOPEC” antitrust law. The proposed "No Oil Producing and Exporting Cartels Act of 2007" or "NOPEC" would amend the Sherman Act to permit federal antitrust challenges to oil producing cartels. The measure was introduced by Rep. John Conyers (Michigan) on May 10. "This legislation will establish that OPEC's activities are not protected by sovereign immunity and that the Federal courts should not decline to hear such a case based on the "act of state" doctrine," Conyers said in introducing the legislation (H.R. 2264). A Senate version of the bill (S. 879) was introduced on March 14 by Sen. Herb Kohl (Wisconsin) and approved by the Senate Judiciary Committee on April 25.

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