Preventing Algorithmic Price Fixing Act: prohibition on price-fixing algorithm use.
If enacted, SB384 empowers the Attorney General, as well as city and county attorneys, to initiate civil actions against violators. The legislation permits civil penalties of up to $1,000 for each violation, as well as provisions for damages, injunctive relief, and restitution. This creates a regulatory framework aimed at discouraging businesses from resorting to algorithmic pricing strategies meant to unfairly influence market prices and undermine competition. As a result, the bill could significantly reshape how businesses formulate pricing strategies, compelling compliance with state regulations to avoid potential penalties.
Senate Bill No. 384, known as the Preventing Algorithmic Price Fixing Act, was introduced by Senator Wahab. This legislation aims to prohibit businesses from using price-fixing algorithms to set prices or supply levels for goods and services. The bill defines a price-fixing algorithm as any software or system that collects, analyzes, and processes pricing information to create pricing models, thereby influencing pricing strategies within the marketplace. With the rapid advancement and adoption of technology in business practices, market regulators have increasingly focused on the implications of such automation on fair competition and consumer rights.
With growing concerns over algorithmic practices leading to market manipulation, the bill faces potential contention, particularly from sectors of the business community that may view such regulations as restrictive or burdensome. Supporters argue that the measure is necessary to maintain a fair market and protect consumers from artificially inflated prices resulting from collusion among businesses using similar pricing algorithms. However, critics may contend that the broad definition of price-fixing algorithms could inadvertently hinder legitimate competitive practices in the tech sphere and among pricing firms, sparking debate on the balance between regulation and innovation.