United States of America: Preventing Algorithmic Collusion Act of 2025 (SB 295) was introduced to California Senate

On 6 February 2025, the Preventing Algorithmic Collusion Act of 2025 was introduced to the Senate of California. The Act aims to regulate the use of pricing algorithms to prevent anti-competitive behaviour and ensure transparency in algorithmic pricing decisions. The Act defines a pricing algorithm as any computational process, including those leveraging machine learning or other artificial intelligence techniques, that analyses data to determine or recommend a price or commercial term within the jurisdiction of the state. It prohibits businesses from using or distributing pricing algorithms that incorporate competitor data and bars the use of such algorithms to set or recommend prices in related markets. Companies with annual revenues of USD 5 million or more that use pricing algorithms must disclose to customers and workers that prices or commercial terms are algorithmically determined. The legislation grants enforcement authority to the Attorney General and district attorneys, allowing them to impose civil penalties, seek injunctive relief, and, in severe cases, dissolve corporations or revoke business licenses for violations. It also mandates that businesses provide detailed reports on their pricing algorithms upon request by the Attorney General. Contracts violating the provisions of this act will be deemed void.