Prohibits individuals from selling, licensing, providing, or using a price-setting algorithm intended for use by competitors in the same market if nonpublic input data is used to set prices, supply levels, rents, or occupancy levels. Permits an affirmative defense for users who show reasonable due diligence, such as obtaining written assurances that the algorithm does not process nonpublic input data. Specifies that each user and each month of a violating algorithm's use constitutes a separate violation. Authorizes the Attorney General, district attorneys, or city or county attorneys to file civil actions for violations, seeking damages, injunctive relief, restitution, or civil penalties up to $1,000 per violation. Declares conflicting contracts void. Confirms this section does not limit antitrust laws' applicability. Defines key terms such as "artificial intelligence," "nonpublic input data," "price-setting algorithm," and "competitors" within the context of the act.
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California SB 384 (Preventing Algorithmic Price Fixing Act 2025)
ETO AGORA · U.S. state and local documents · 2025
Summary
Prohibits individuals from selling, licensing, providing, or using a price-setting algorithm intended for use by competitors in the same market if nonpublic input data is used to set prices, supply levels, rents, or occupancy levels.
Permits an affirmative defense for users who show reasonable due diligence, such as obtaining written assurances that the algorithm does not process nonpublic input data.
Specifies that each user and each month of a violating algorithm's use constitutes a separate violation.
Authorizes the Attorney General, district attorneys, or city or county attorneys to file civil actions for violations, seeking damages, injunctive relief, restitution, or civil penalties up to $1,000 per violation.
Declares conflicting contracts void.
Confirms this section does not limit antitrust laws' applicability.
Defines key terms such as "artificial intelligence," "nonpublic input data," "price-setting algorithm," and "competitors" within the context of the act.
Enacts the Preventing Algorithmic Price Fixing Act in the California Business and Professions Code.
The people of the State of California do enact as follows:
SECTION 1. This act shall be known, and may be cited, as the Preventing Algorithmic Price Fixing Act.
SEC. 2. Chapter 40 (commencing with Section 22949.85) is added to Division 8 of the Business and Professions Code, to read:
Prohibits selling or using price-setting algorithms that use nonpublic data in competitive markets unless due diligence is proven.
Chapter 40. Price-Setting Algorithm
22949.85. (a) A person shall not sell, license, provide, or use a price-setting algorithm with the intent or reasonable expectation that it be used by two or more competitors in the same market if the person knows or should know that the algorithm processes nonpublic input data to set either of the following:
(1) A price or supply level of a good or service.
(2) A rent or occupancy level of rental property.
(b) It shall be an affirmative defense to liability for a user of a price-setting algorithm who demonstrates by the preponderance of the evidence that they exercised reasonable due diligence, including obtaining written assurances from the person selling, licensing, or providing the algorithm that the algorithm does not process nonpublic input data.
Defines each use or user of a violating price-setting algorithm as a separate violation.
(c) (1) For a person who sells, licenses, or provides a price-setting algorithm in violation of subdivision (a), each authorized user of, or user under a license for, the price-setting algorithm constitutes a separate violation.
(2) For the purposes of a person who uses a price-setting algorithm in violation of subdivision (a), each calendar month of use constitutes a separate violation.
(d) The Attorney General or a district attorney, in the name of the people of the State of California, or a city attorney or county counsel, in the name of the city or county, may file a civil action for a violation of this section to recover actual damages or for injunctive relief, restitution, or civil penalties of up to one thousand dollars ($1,000) per violation, or any combination of those remedies. The court shall award reasonable attorney's fees and costs to the Attorney General, district attorney, city attorney, or county counsel, as applicable, if they are the prevailing party in the action.
(e) A contract that conflicts with this section is to that extent void.
(f) This section does not limit the applicability of antitrust laws.
Defines "artificial intelligence" as a machine-based system with varying autonomy affecting environments via outputs.
(g) For the purposes of this section:
(1) "Artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence a physical or virtual environment.
(2) "Antitrust laws" has the same meaning as defined in the Clayton Act (15 U.S.C. Sec. 12), and includes Section 45 of Title 15 of the United States Code, including provisions commonly known as the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7).
(3) "Nonpublic input data" means data that is confidential, nonpublic, and sensitive information of competitors, but does not include data that was collected more than one year before the use or distribution of the price-setting algorithm.
Defines "price-setting algorithm" as AI processing nonpublic data to create pricing or rental strategies.
@ (4) (A) "Price-setting algorithm" means a software, computer system, computer process, algorithmic program, or artificial intelligence that processes nonpublic input data for the purpose of producing a pricing or rental strategy.
(B) "Price-setting algorithm" does not include a multiple listing service, as that term is defined in Section 1087 of the Civil Code.
(5) "Competitors" means two or more persons or business entities, including landlords, that offer similar or substitutable goods, services, or real property for lease in the same relevant market to the same or overlapping customer base.