US SB232: Preventing Algorithmic Collusion Act of 2025

In one paragraph

The federal S 232 (Preventing Algorithmic Collusion Act of 2025) would make it unlawful to use or distribute a pricing algorithm that uses or was trained with nonpublic competitor data, with federal civil penalties. It would also require audit reports on request and disclosures of algorithmic pricing by companies with $5 million or more in revenue. Read twice and referred to the Senate Judiciary Committee January 23, 2025; it has not passed either house.

Plain-English summary, written with AI assistance. The official text controls.

What it means for business

If enacted, companies and vendors using or selling pricing algorithms could not use nonpublic competitor data, would have to answer audit requests, and those with $5 million or more in revenue would have to disclose algorithmic pricing.

Key provisions

1. 1Sec. 3: on written request from the Attorney General or FTC, a person using or distributing a pricing algorithm would have 30 days to submit a certified written report on it
2. 2Sec. 4: unlawful to use or distribute a pricing algorithm that uses, incorporates, or was trained with nonpublic competitor data; takes effect 90 days after enactment
3. 3Sec. 4 penalties: in a civil action by the FTC or Attorney General, not less than $10,000 per day of violation or the sum of the price of each product or service sold using the algorithm, plus injunctive relief
4. 4Sec. 5: presumption of an agreement under Sherman Act section 1 and of an unfair method of competition under FTC Act section 5 when the defendant distributed the algorithm to two or more persons for use, or used by them, in the same or a related market, or used it alongside another user in that market; only a defendant that did not develop or distribute it may rebut, by clear and convincing evidence it did not and could not reasonably have known of the nonpublic data
5. 5Sec. 6: persons with $5,000,000 or more in annual revenue using pricing algorithms must disclose that to customers, employees and contractors; FTC civil penalty of not less than $5,000 per day
6. 6Sec. 7: FTC would publish a study of pricing algorithms within 2 years of enactment

Latest legislative action

Jan 23, 2025. Read twice and referred to the Committee on the Judiciary.