The new Preventing Algorithmic Collusion Act (S. 232) was introduced in the Senate after failing to pass in the previous session. The legislation was introduced by Senator Amy Klobuchar, a Democrat from Minnesota, and co-sponsored by eight other Senate Democrats, including Ron Wyden of Oregon, who co-wrote the original bill.
The Purpose of the Bill
Among its various provisions, the bill aims to address what the author and sponsors refer to as a loophole in current antitrust law. This loophole requires proof of a formal agreement to fix prices, a situation that may not occur when algorithms are used to set prices. Sharing non-public information with an algorithm will be seen as a price-fixing agreement under the bill’s definition. The proposed legislation would mandate that companies using algorithms for pricing disclose this practice, forbid the employment of non-public information for training these algorithms, and instruct the Federal Trade Commission to investigate the effects of pricing algorithms on market competition.
Senators Introduce Bill to Combat Collusion as States Move to Ban Revenue Management Software
On January 30, 2024, a related bill titled the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act of 2024 was introduced by Wyden and Senator Peter Welch, a Democrat from Vermont. Both bills were read twice and sent to the Senate Committee on the Judiciary, but no further action was taken, according to Congressional records. Additionally, a similar bill was introduced in the House of Representatives in June, but it did not advance out of committee.
Several local jurisdictions have banned the use of revenue management software this past year, including Philadelphia and San Francisco. Additionally, states that introduced residential revenue management bans in their assemblies but did not pass them in 2024 include Illinois, New Hampshire, California, Colorado, Connecticut, New York, Oklahoma, and Rhode Island.
More information can be found here.
