California Preventing Algorithmic Collusion Act of 2025.
If enacted, SB 295 would amend existing laws within the Business and Professions Code of California, specifically focusing on pricing algorithms and their usage in trade. It establishes civil penalties for violations, allowing the Attorney General to pursue significant financial penalties (up to $1 million), orders for restitution, and even the dissolution of corporations found to be non-compliant. This signifies a robust approach to regulating the business practices around pricing algorithms, aiming to safeguard fair competition and consumer rights.
Senate Bill 295, titled the California Preventing Algorithmic Collusion Act of 2025, aims to address concerns regarding algorithmic pricing practices that could potentially lead to antitrust violations. This bill obligates individuals or entities that utilize pricing algorithms to disclose pertinent information about their algorithms to the California Attorney General. By imposing such requirements, the legislation seeks to enhance transparency around how prices are set, especially when competitor data is involved.
The sentiment around this bill appears to be cautious yet supportive among consumer advocacy groups, who view it as a necessary measure to prevent potential abuses in an increasingly automated pricing landscape. In contrast, some business representatives express concerns over the regulatory burden this could impose, particularly regarding the disclosure requirements for large firms using complex pricing models, fearing it may hinder innovation and competitive strategies in the marketplace.
Notable points of contention arise from the bill's emphasis on transparency concerning algorithmic processes, particularly the restriction against using algorithms that incorporate competitor data without disclosure. Critics argue that this could limit how businesses operate within competitive markets and may unintentionally hamper economic growth. Moreover, the civil penalties for violations could be perceived as excessive by businesses that may struggle to comply fully with the regulations.