Section 1 Short title
This Act may be cited as the “Shrinkflation Prevention Act of 2024”.
Shrinkflation Prevention Act of 2024
A BILL
To direct the Federal Trade Commission to issue regulations to establish shrinkflation as an unfair or deceptive act or practice, and for other purposes.
Sec. 2 Findings
Congress finds the following:
According to the Bureau of Economic Analysis, from the third quarter of 2020 to the second quarter of 2022, corporate profits rose by 75 percent, and Federal Reserve research found that 42 percent of inflation over that same time period went toward greater corporate profits.
Shrinkflation, or product downsizing, occurs when a company decreases the amount or size of a consumer product and charges the same price, or a higher price, for such smaller product.
Companies seek to deceive consumers when they practice shrinkflation without clearly disclosing the size change and per unit price increase of a product.
According to the Bureau of Labor Statistics, roughly 10 percent of inflation in some consumer product categories is driven by shrinkflation.
Deceptive shrinkflation tactics allow companies to profit off unaware consumers, as academic research shows that consumers are less sensitive to changes in product size than to changes in price.
Shrinkflation is disrupting the ability of families in the United States to save money.
Sec. 3 Prohibition of shrinkflation
Definition of shrinkflation—
In general— In this Act, the term shrinkflation means the practice of downsizing, or reducing the amount or size of a consumer product (as defined in section 101 of the Magnuson-Moss Warranty—Federal Trade Commission Improvement Act (15 U.S.C. 2301)) while not decreasing the price of such product by a commensurate amount.
Modifications— The Federal Trade Commission (in this section referred to as the “Commission”) may promulgate regulations under section 553 of title 5, United States Code, to modify the definition in paragraph (1) as the Commission considers appropriate.
Prohibition— Not later than 18 months after the date of enactment of this Act, the Commission shall promulgate regulations under section 553 of title 5, United States Code, to prohibit any manufacturer from engaging in shrinkflation.
Sec. 4 Enforcement
Enforcement by the Commission—
Unfair or deceptive acts or practices— A violation of a regulation promulgated under section 3(b) shall be treated as a violation of a rule defining an unfair or deceptive act or practice under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
Powers of the Commission—
In general— The Commission shall enforce the regulations promulgated under section 3(b) in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act.
Privileges and immunities— Any person who violates a regulation promulgated under section 3(b) shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act (15 U.S.C. 41 et seq.).
Authority preserved— Nothing in this Act shall be construed to limit the authority of the Commission under any other provision of law.
Rulemaking— The Commission shall promulgate in accordance with section 553 of title 5, United States Code, such rules as may be necessary to carry out this Act.
Enforcement by States—
In general— In any case in which the attorney general of a State has reason to believe that an interest of the residents of the State has been or is threatened or adversely affected by the engagement of any person in a practice that violates a regulation promulgated under section 3(b), the attorney general of the State may, as parens patriae, bring a civil action on behalf of the residents of the State in an appropriate district court of the United States—
to enjoin further violation of such regulation by such person;
to compel compliance with such regulation;
to obtain a permanent, temporary, or preliminary injunction;
to obtain civil penalties;
to obtain damages, restitution, or other compensation on behalf of such residents; or
to obtain any other equitable relief deemed appropriate by the court.
Rights of the Commission—
Notice to the Commission—
In general— Except as provided in clause (iii), the attorney general of a State shall notify the Commission in writing that the attorney general intends to bring a civil action under paragraph (1) not later than 10 days before initiating the civil action.
Contents— The notification required by clause (i) with respect to a civil action shall include a copy of the complaint to be filed to initiate the civil action.
Exception— If it is not feasible for the attorney general of a State to provide the notification required by clause (i) before initiating a civil action under paragraph (1), the attorney general shall notify the Commission immediately upon instituting the civil action.
Intervention by the Commission— The Commission may—
intervene in any civil action brought by the attorney general of a State under paragraph (1); and
upon intervening—
be heard on all matters arising in the civil action; and
file petitions for appeal of a decision in the civil action.
Investigatory powers— Nothing in this subsection may be construed to prevent the attorney general of a State from exercising the powers conferred on the attorney general by the laws of the State to conduct investigations, to administer oaths or affirmations, or to compel the attendance of witnesses or the production of documentary or other evidence.
Action by the Commission— If the Commission institutes a civil action or an administrative action with respect to a violation of a regulation promulgated under section 3(b), the attorney general of a State may not, during the pendency of such action, bring a civil action under paragraph (1) against any defendant named in the complaint of the Commission for the violation with respect to which the Commission instituted such action.
Venue; service of process—
Venue— Any action brought under paragraph (1) may be brought in—
the district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28, United States Code; or
another court of competent jurisdiction.
Service of process— In an action brought under paragraph (1), process may be served in any district in which the defendant—
is an inhabitant; or
may be found.
Actions by other State officials—
In general— In addition to civil actions brought by attorneys general under paragraph (1), any other official of a State who is authorized by the State to do so may bring a civil action under paragraph (1), subject to the same requirements and limitations that apply under this subsection to civil actions brought by attorneys general.
Savings provision— Nothing in this subsection may be construed to prohibit an authorized official of a State from initiating or continuing any proceeding in a court of the State for a violation of any civil or criminal law of the State.