II
119THCONGRESS
1
STSESSION S. 232
To prevent anticompetitive conduct through the use of pricing algorithms
by prohibiting the use of pricing algorithms that can facilitate collusion
through the use of nonpublic competitor data, creating an antitrust
law enforcement audit tool, increasing transparency, and enforcing viola-
tions through the Sherman Act and Federal Trade Commission Act,
and for other purposes.
IN THE SENATE OF THE UNITED STATES
JANUARY23, 2025
Ms. K
LOBUCHAR(for herself, Mr. WYDEN, Mr. DURBIN, Mr. WELCH, Ms.
H
IRONO, Mr. LUJA´N, Mrs. SHAHEEN, Mr. MURPHY, and Mr.
B
LUMENTHAL) introduced the following bill; which was read twice and re-
ferred to the Committee on the Judiciary
A BILL
To prevent anticompetitive conduct through the use of pric-
ing algorithms by prohibiting the use of pricing algo-
rithms that can facilitate collusion through the use of
nonpublic competitor data, creating an antitrust law en-
forcement audit tool, increasing transparency, and en-
forcing violations through the Sherman Act and Federal
Trade Commission Act, and for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
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SECTION 1. SHORT TITLE. 1
This Act may be cited as the ‘‘Preventing Algorithmic 2
Collusion Act of 2025’’. 3
SEC. 2. DEFINITIONS. 4
In this Act: 5
(1) A
NTITRUST LAWS.—The term ‘‘antitrust 6
laws’’— 7
(A) has the meaning given that term in 8
subsection (a) of the first section of the Clayton 9
Act (15 U.S.C. 12); and 10
(B) includes section 5 of the Federal 11
Trade Commission Act (15 U.S.C. 45). 12
(2) C
OMMERCIAL TERMS .—The term ‘‘commer-13
cial terms’’ means— 14
(A) level of service; 15
(B) availability; 16
(C) output, including quantities of prod-17
ucts produced or distributed or the amount or 18
level of service provided; or 19
(D) rebates or discounts made available. 20
(3) C
OMMISSION.—The term ‘‘Commission’’ 21
means the Federal Trade Commission. 22
(4) D
ISTRIBUTE; DISTRIBUTION; DISTRIB-23
UTING.—The terms ‘‘distribute’’, ‘‘distribution’’, and 24
‘‘distributing’’ include selling, licensing, providing 25
access to, or otherwise making available by any 26
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means, including through a subscription or the sale 1
of a service. 2
(5) N
ONPUBLIC COMPETITOR DATA .—The term 3
‘‘nonpublic competitor data’’— 4
(A) means nonpublic data that is derived 5
from or otherwise provided by another person 6
that competes in the same market as a person, 7
or a related market; and 8
(B) does not include information distrib-9
uted, reported, or otherwise communicated in a 10
way that does not reveal any underlying data 11
from a competitor, such as narrative industry 12
reports, news reports, business commentaries, 13
or generalized industry survey results. 14
(6) N
ONPUBLIC DATA.—The term ‘‘nonpublic 15
data’’ means information that is not widely available 16
or easily accessible to the public, including informa-17
tion about price, commercial terms, and related 18
products or services, regardless of whether the data 19
is attributable to a specific competitor or 20
anonymized. 21
(7) P
ERSON.—The term ‘‘person’’ has the 22
meaning given that term in subsection (a) of the 23
first section of the Clayton Act (15 U.S.C. 12). 24
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(8) PRICE.—The term ‘‘price’’ means the 1
amount of money or other thing of value, whether 2
tangible or not, expected, required, or given in pay-3
ment for any product or service, including com-4
pensation paid to an employee or independent con-5
tractor for services provided. 6
(9) P
RICING ALGORITHM.—The term ‘‘pricing 7
algorithm’’ means any computational process, in-8
cluding a computational process derived from ma-9
chine learning or other artificial intelligence tech-10
niques, that processes data to recommend or set a 11
price or commercial term that is in or affecting 12
interstate or foreign commerce. 13
SEC. 3. COMPETITION LAW ENFORCEMENT AUDIT. 14
(a) I
NGENERAL.—A person using or distributing a 15
pricing algorithm, upon a written request by the Attorney 16
General or the Commission, shall, not later than 30 days 17
after the date of the written request, or any later date 18
approved by the Attorney General or the Commission, re-19
spectively, provide to the Attorney General or the Commis-20
sion, respectively, a written report on each pricing algo-21
rithm identified in the request. 22
(b) R
EPORTCONTENTS.—Each report under sub-23
section (a) shall include— 24
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(1) information on whether the person is re-1
sponsible for the development or distribution of the 2
pricing algorithm, or whether a third party is re-3
sponsible for the development or distribution of the 4
pricing algorithm, including the identity and contact 5
information of any other person responsible for the 6
development or distribution of the pricing algorithm; 7
(2) information on whether the pricing algo-8
rithm autonomously sets prices or commercial terms 9
and whether there is human review of any rec-10
ommendation or decision of the pricing algorithm; 11
(3) an explanation of the rules or processes that 12
the pricing algorithm uses to set or recommend 13
prices or commercial terms; 14
(4) a description of all data the pricing algo-15
rithm uses to set or recommend prices or commer-16
cial terms, including data used to train the algo-17
rithm; 18
(5) all sources and collection processes, includ-19
ing the frequency of collection, of any data that the 20
pricing algorithm uses to set or recommend prices or 21
commercial terms; 22
(6) whether the pricing algorithm engages in 23
price discrimination by setting or recommending dif-24
ferent prices or commercial terms for— 25
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(A) different customers seeking identical or 1
nearly identical products or services, and if so, 2
the factors used in differentiating among such 3
customers; or 4
(B) different employees or independent 5
contractors providing substantially similar serv-6
ices, and if so, the factors used in differen-7
tiating among such employees or independent 8
contractors; and 9
(7) any changes made to the pricing algorithm 10
between the date of receipt of the request under sub-11
section (a) and the date of certification under sub-12
section (c). 13
(c) C
ERTIFICATION OFREPORT.—The Chief Execu-14
tive Officer, Chief Economist, Chief Technology Officer, 15
or a corporate officer of similar authority of a person shall 16
certify, under penalty of perjury, the accuracy of a report 17
under subsection (a) submitted by the person. 18
(d) C
ONFIDENTIALITY.—All information submitted 19
in a report under subsection (a) shall be treated as con-20
fidential and shall be considered to be privileged and con-21
fidential trade secrets and commercial or financial infor-22
mation exempt under subsection (b)(4) of section 552 of 23
title 5, United States Code, from being made available to 24
the public under subsection (a) of that section. 25
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(e) INFORMATIONSHARING.— 1
(1) I
N GENERAL.—A report under subsection 2
(a) may be shared— 3
(A) between the Department of Justice 4
and the Commission; and 5
(B) with the National Institute of Stand-6
ards and Technology for technical assistance in 7
understanding the report. 8
(2) L
IMITATION.—The National Institute of 9
Standards and Technology shall not disclose the con-10
tents of a report shared under paragraph (1) or the 11
analysis of the report by the National Institute of 12
Standards and Technology to any person, except the 13
Department of Justice or Commission, whichever 14
sought the technical assistance. 15
(f) R
ULES OFCONSTRUCTION.—Nothing in this sec-16
tion shall— 17
(1) limit the ability of the Commission or the 18
Attorney General to issue a civil investigative de-19
mand, to issue a subpoena, to seek discovery in the 20
course of litigation, or otherwise obtain information 21
through other means available to the Commission or 22
the Attorney General; or 23
(2) restrict the use of information submitted in 24
a report under subsection (a) in the course of a for-25
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mal investigation, enforcement action, litigation, 1
trial, or other proceeding, in accordance with the 2
confidentiality procedures applicable to such pro-3
ceeding. 4
SEC. 4. PREVENTING COLLUSIVE ACTIVITY IN PRICING AL-5
GORITHMS. 6
(a) I
NGENERAL.—It shall be unlawful for a person 7
to use or distribute any pricing algorithm that uses, incor-8
porates, or was trained with nonpublic competitor data. 9
(b) C
IVILACTION.—If the Commission or the Attor-10
ney General has reason to believe that a person has vio-11
lated subsection (a), the Commission, in its own name by 12
any of its attorneys designated by it for such purpose, or 13
the Attorney General may bring a civil action against the 14
person in an appropriate district court of the United 15
States to seek to recover— 16
(1) a civil penalty of— 17
(A) not less than $10,000, adjusted for in-18
flation on the basis of the Consumer Price 19
Index, for each day during which the violation 20
occurs or continues to occur; or 21
(B) the sum of the price of each product 22
or service sold using the pricing algorithm in 23
violation of subsection (a); and 24
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(2) other appropriate relief, including an in-1
junction or other equitable relief. 2
(c) E
FFECTIVEDATE.—Subsection (a) shall take ef-3
fect on the date that is 90 days after the date of enact-4
ment of this Act. 5
SEC. 5. ALGORITHMIC PRICE FIXING. 6
(a) P
RESUMPTION OFAGREEMENT.—With respect to 7
the use of a pricing algorithm that would violate section 8
4 of this Act, there shall be a presumption for purposes 9
of section 1 of the Sherman Act (15 U.S.C. 1) that the 10
defendant entered into an agreement, contract, combina-11
tion, or conspiracy in restraint of trade and for purposes 12
of section 5(a) of the Federal Trade Commission Act (15 13
U.S.C. 45(a)) that the defendant has engaged in an unfair 14
method of competition if the plaintiff establishes that— 15
(1) the defendant distributed the pricing algo-16
rithm to 2 or more persons— 17
(A) with the intent that the pricing algo-18
rithm be used to set or recommend a price or 19
commercial term of a product or service in the 20
same market or a related market; or 21
(B) and 2 or more persons used the pric-22
ing algorithm to set or recommend a price or 23
commercial term of a product or service in the 24
same market or a related market; or 25
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(2)(A) the defendant used the pricing algorithm 1
to set or recommend a price or commercial term of 2
a product or service; and 3
(B) the pricing algorithm was used by another 4
person to set or recommend a price or commercial 5
term of a product or service in the same market or 6
a related market. 7
(b) R
EBUTTAL.—The presumption under subsection 8
(a) shall not apply to a defendant if the defendant did 9
not develop or distribute the pricing algorithm and the de-10
fendant demonstrates by clear and convincing evidence 11
that the defendant did not have actual knowledge or could 12
not have reasonably known that the pricing algorithm used 13
nonpublic competitor data. 14
(c) J
OINT ANDSEVERALLIABILITY.—In a civil case 15
in which the presumption under subsection (a) is applica-16
ble, any persons that distributed the pricing algorithm and 17
knew, or could reasonably have known, that the pricing 18
algorithm would use, incorporate, or be trained with non-19
public competitor data shall be jointly and severally liable 20
for any violation of section 1 of the Sherman Act (15 21
U.S.C. 1) or section 5(a) of the Federal Trade Commis-22
sion Act (15 U.S.C. 45(a)). 23
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(d) RELATION TOANTITRUSTLAWS.—Nothing in 1
this section shall impair or limit the applicability of the 2
antitrust laws. 3
(e) E
FFECTIVEDATE.—Subsection (a) shall take ef-4
fect on the date that is 90 days after the date of enact-5
ment of this Act. 6
SEC. 6. TRANSPARENCY IN PRICING ALGORITHMS. 7
(a) I
NGENERAL.—Any person that has $5,000,000 8
or more in annual revenue that uses a pricing algorithm 9
to recommend or set a price or commercial term shall 10
clearly disclose, as applicable— 11
(1) to a customer, before the customer pur-12
chases the relevant product or service, that the price 13
or a commercial term, as applicable, is set or rec-14
ommended by a pricing algorithm; and 15
(2) to a current or prospective employee or 16
independent contractor that the price or a commer-17
cial term for services rendered as an employee or 18
independent contractor is set or recommended by a 19
pricing algorithm. 20
(b) A
DDITIONALDISCLOSURES.— 21
(1) P
RICE DISCRIMINATION.—If applicable, a 22
disclosure under subsection (a) shall state that the 23
pricing algorithm sets or recommends different 24
prices or commercial terms for— 25
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(A) different customers seeking identical or 1
nearly identical products or services; or 2
(B) employees or independent contractors 3
providing substantially similar services. 4
(2) T
HIRD-PARTY ALGORITHM.—If applicable, a 5
disclosure under subsection (a) shall— 6
(A) state that the pricing algorithm was 7
developed or distributed by a person other than 8
the person making the disclosure; and 9
(B) provide the identity of the person that 10
developed or distributed the pricing algorithm. 11
(c) E
NFORCEMENT.—Failure to provide a disclosure 12
under subsection (a), including the information required 13
under subsection (b), shall constitute an unfair or decep-14
tive act or practice under section 5 of the Federal Trade 15
Commission Act (15 U.S.C. 45). 16
(d) C
IVILACTION.—If the Commission has reason to 17
believe that a person has violated subsection (a) or (b), 18
the Commission, in its own name by any of its attorneys 19
designated by it for such purpose, may bring a civil action 20
in an appropriate district court of the United States to 21
recover— 22
(1) a civil penalty of not less than $5,000, ad-23
justed for inflation on the basis of the Consumer 24
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Price Index, for each day during which the violation 1
occurs or continues to occur; and 2
(2) other appropriate relief, including an in-3
junction or other equitable relief. 4
(e) R
ELATION TOANTITRUSTLAWS.—Nothing in 5
this section shall impair or limit the applicability of the 6
antitrust laws. 7
SEC. 7. FTC STUDY. 8
Not later than 2 years after the date of enactment 9
of this Act, the Commission shall publish the results of 10
a study of the use of pricing algorithms, including infor-11
mation on— 12
(1) the prevalence of pricing algorithms; 13
(2) the frequency of the use of pricing algo-14
rithms to engage in price or wage discrimination; 15
(3) the potential for persons to use pricing algo-16
rithms to engage in behavior that increases prices, 17
lowers wages, reduces output, lowers quality, deters 18
innovation, or otherwise harms the competitive proc-19
ess outside of the price fixing context; 20
(4) the potential benefits or efficiencies of pric-21
ing algorithms; 22
(5) any industries, sectors, or markets in which 23
pricing algorithms may warrant additional oversight 24
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or regulation to protect competition and consumers; 1
and 2
(6) recommendations for additional legislation, 3
regulation, or rulemaking relating to competition 4
and consumer protection issues arising from the use 5
of pricing algorithms. 6
Æ
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