Testimony before the Senate Committee on Banking, Housing, and Urban Affairs: “How Shrinkflation and Technology Impact Consumers’ Finances”
May 1, 2024
By Alí R. Bustamante
Below is an excerpt from Alí R. Bustamante’s testimony before the Senate Committee on Banking, Housing, and Urban Affairs on May 2, 2024.
Watch the hearing: How Shrinkflation and Technology Impact Consumers’ Finances
- Inflation is being driven, in part, by corporate profiteering related to firms’ price-setting power.
- Corporate profiteering is harming consumers, workers, and other businesses.
- Government has tools that can restrict corporate profiteering and protect consumers and small businesses.
- We need to enforce and strengthen antitrust laws to prevent monopolistic practices and ensure competitive markets, particularly in industries where a few companies control significant market share, leading to higher markups.
- Policymakers can move to create guidelines and restrictions around the use of dynamic and personalized pricing to prevent unfair and deceptive practices by requiring businesses to fully disclose the pricing structure of their products and services. This would disincentivize corporations from employing these predatory pricing practices.
- To improve fairness and transparency in pricing, administrative agencies like the Consumer Financial Protection Bureau can mandate clearer disclosure of pricing components and service fees and enforce rules against deceptive pricing practices or hidden fees. This is particularly impactful in sectors prone to high markups, such as financial services and healthcare.
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