On February 6, 2025, a group of U.S. Senators introduced the Preventing Algorithmic Collusion Act in Washington, D.C. The legislation aims to prevent companies from using algorithms to engage in price-fixing activities that raise prices and limit competition. This move comes after reports and lawsuits have highlighted how large corporations, including RealPage, have used algorithms to increase rents significantly.
Senator Mazie K. Hirono stated, “Algorithmic price fixing enables businesses to artificially inflate their prices while hiding their collusion behind technology, stifling competition, and leaving consumers to suffer the consequences.” She emphasized that the legislation is intended to ensure transparent competition and protect consumers and small businesses.
Current antitrust laws prohibit price fixing but may not adequately address situations where companies use algorithms for pricing decisions without explicit agreements. The new bill seeks to close this loophole by presuming a price-fixing agreement when competitors share non-public information through pricing algorithms.
The proposed law would require companies using such algorithms to disclose this practice and allow antitrust enforcers to audit them if consumer harm is suspected. It also bans the use of competitively sensitive information from direct competitors in algorithm training and directs the Federal Trade Commission (FTC) to study the impact of pricing algorithms on competition.
The Preventing Algorithmic Collusion Act has received endorsements from Consumer Reports, the Open Markets Institute, and Accountable.US.
