The Preventing Algorithmic Collusion Act of 2025 mandates transparency, reporting, and strict antitrust prohibitions for businesses using AI-driven pricing algorithms to ensure fair competition and prevent price fixing.
Amy Klobuchar
Senator
MN
The Preventing Algorithmic Collusion Act of 2025 aims to curb anti-competitive behavior by prohibiting the use of pricing algorithms that rely on nonpublic competitor data. The bill mandates transparency by requiring businesses to disclose the use of such algorithms to customers and workers, while granting the FTC and the Attorney General authority to audit and penalize non-compliant entities. Additionally, it establishes a legal presumption of price-fixing when multiple parties use the same algorithm to set prices in the same market.
Preventing Algorithmic Collusion Act: New Rules Target AI Price-Fixing with $10,000 Daily Fines
If you’ve ever felt like every store or rental site is magically raising prices at the exact same time, you aren’t just being paranoid—you’re likely seeing 'pricing algorithms' in action. This bill takes aim at the software behind the scenes, making it illegal for companies to use AI or computational tools to set prices if those tools are trained on nonpublic data from their competitors. Starting 90 days after it passes, the bill would slap violators with a minimum $10,000 daily fine or force them to cough up the total amount they made from those sales. It basically treats 'the computer made me do it' as no excuse for price-fixing.
Opening the Black Box
One of the biggest hurdles in modern business is that nobody really knows how these 'black box' algorithms make their decisions. Section 3 of the bill changes that by giving the FTC and DOJ the power to demand an 'audit report' from any company using this tech. If you’re a business owner with $5 million or more in revenue, you’d have 30 days to explain exactly what data your AI uses, where it came from, and whether it’s charging different prices to different people for the same product. This isn't just for retailers; it also covers how much independent contractors or employees are paid, meaning the app you use for work might have to explain why your neighbor gets a different rate for the same shift.
The 'Guilty Until Proven Innocent' Twist
Section 5 introduces a heavy-duty legal shift: a 'presumption' of illegal price-fixing. If a software company sells a pricing tool to two competitors in the same market, the law will automatically assume they’re conspiring to keep prices high. For the developers who build these tools, the stakes are even higher—they can be held 'jointly and severally' liable, meaning they could be on the hook for the entire financial damage caused by their clients. While there’s a 'good faith' out for businesses that truly didn't know their software was using secret competitor data, they’ll have to provide 'clear and convincing evidence' to prove it, which is a high bar to clear in court.
No More Secret Surge Pricing
For the average person, the most noticeable change will be at the checkout screen. Section 6 requires any business with over $5 million in revenue to tell you upfront if an algorithm is setting the price you see. If you’re a shopper seeing a different price than your friend for the same flight, or a gig worker seeing a different pay rate for the same delivery, the company has to disclose that they’re using 'price differentiation.' While this transparency is a win for consumers, the bill’s broad definition of 'nonpublic data' might create a massive compliance headache for smaller tech firms and businesses trying to stay competitive without accidentally breaking the new rules.