Existing law governs various business practices in this state, including certain laws relating to the use of technology. 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, the Preventing Algorithmic Price Fixing Act, would prohibit a person from selling, licensing, providing, or using a price-setting algorithm, as defined, with the intent or reasonable expectation that it be used by 2 or more competitors, as defined, in the same market if the person knows or should know that the algorithm processes nonpublic data, as defined, to set either: (1) a price or supply level of a good or service or (2) a rent or occupancy level of rental property. The bill would provide a user of a price-setting algorithm an affirmative defense to liability if the user exercised reasonable due diligence, as specified. The bill would authorize the Attorney General or a district attorney, city attorney, or county counsel to file a civil action for violations of these provisions, as specified, including for a civil penalty of up to $1,000 per violation, as specified.

This bill would declare that a contract that violates these provisions is to that extent void and that its provisions do not limit the applicability of antitrust laws.