Bill > SB295

This bill, known as the California Preventing Algorithmic Collusion Act of 2025, aims to prevent businesses from using pricing algorithms that could facilitate anti-competitive practices. The legislation prohibits companies from distributing or recommending pricing algorithms that process confidential competitor data if doing so could potentially help competitors coordinate pricing or commercial terms. Specifically, businesses cannot distribute an algorithm to multiple competitors or use algorithm recommendations that incorporate competitor data if they know or should know that the algorithm could enable price coordination. The bill provides an affirmative defense for companies that can demonstrate they exercised reasonable due diligence before using such algorithms, such as obtaining written assurances that the algorithm does not process competitor data. Violations can result in significant penalties, including civil actions by the Attorney General or local prosecutors seeking restitution, punitive damages, and civil penalties of up to $25,000 per violation. Each authorized user of a problematic algorithm, each recommendation made, or each month of use can constitute a separate violation. The law does not apply to competitor data collected more than one year prior, and it explicitly does not impair existing antitrust laws. Notably, the bill exempts credit scoring tools and computational tools subject to the Fair Credit Reporting Act from its provisions.

Budget and Finance, Business and Industry, Justice

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB295