Existing law establishes the Attorney General as the head of the Department of Justice, with charge of all legal matters in which the state is interested, except as specified. Existing law imposes various responsibilities on the Attorney General related to consumer protection, including, among others, the supervision of charitable trusts and the enforcement of antitrust laws. Existing law, commonly known as the Cartwright Act, identifies certain acts that are unlawful restraints of trade and unlawful trusts and prescribes provisions for its enforcement through civil actions.

This bill would enact the California Preventing Algorithmic Collusion Act of 2025, to prohibit a person, as described, from distributing or making recommendations based on the use of a pricing algorithm to 2 or more competitors, as defined, under specified circumstances, if the person knows or should know that the pricing algorithm processes competitor data, as defined.

This bill would also prohibit a person from using the recommendation of a pricing algorithm that processes competitor data, as specified, if the person knows or should know that the pricing algorithm uses or incorporates competitor data. The bill would establish an affirmative defense to liability under this prohibition for a person who demonstrates by a preponderance of evidence that they exercised reasonable due diligence before using the recommendations of a pricing algorithm, as specified. The bill would specify when the use, recommendation, or distribution of a pricing algorithm constitutes separate violations. The bill would declare that these provisions do not apply if all of the competitor data processed by the pricing algorithm was collected more than one year before the use, recommendation, or distribution of the pricing algorithm. The bill would declare that a contract that violates these provisions is to that extent void.

This bill would authorize the Attorney General, a district attorney, a county counsel, or a city attorney to bring a civil action for violation of the above-described provisions to seek restitution, punitive damages, a civil penalty of up to $25,000 per violation, and other appropriate relief, as provided.

The bill would declare that its provisions shall not impair or limit the applicability of antitrust laws, as defined. The bill would exempt from its provisions the development, distribution, output, or use of a credit score or other computational tool either subject to specified law or provided by a commercial credit reporting agency, as specified.