Preventing Algorithmic Collusion Act of 2025

Prevention of Collusion: The bill prohibits using pricing algorithms trained with or incorporating nonpublic competitor data, which targets actions that facilitate collusion (Section 4).

Increased Consumer and Worker Awareness: Companies with at least $5,000,000 in annual revenue must disclose to customers and employees if a pricing algorithm is setting prices or terms (Section 6).

Transparency Regarding Price Discrimination: Disclosures must include information if an algorithm recommends different prices for different customers or workers (Section 6).

Enhanced Oversight via Audits: The law allows the government to demand written reports detailing an algorithm's rules, data sources, and whether it operates autonomously (Section 3).

Information Gathering for Future Protections: The FTC is required to conduct a study to identify how algorithms might increase prices, lower wages, or harm the competitive process (Section 7).

Legal Burdens for Algorithm Users: Companies using pricing algorithms may be required to provide detailed reports to the government within 30 days of a request (Section 3).

Financial Penalties for Violations: Using prohibited algorithms can lead to civil penalties of at least $10,000 per day or the total sum of the price of each product or service sold (Section 4).

Presumption of Guilt in Court: Under certain conditions, there is a legal presumption that a defendant entered into a conspiracy or unfair competition agreement (Section 5).

Civil Penalties for Disclosure Failures: Failure to follow the transparency and disclosure requirements can lead to civil penalties of at least $5,000 per day (Section 6).

Potential Liability for Third Parties: Those who distribute a pricing algorithm may be held jointly and severally liable if they knew the algorithm used nonpublic competitor data (Section 5).