Preventing Algorithmic Price Fixing Act: prohibition on price-fixing algorithm use.

Senator Wahab's Preventing Algorithmic Price Fixing Act prohibits businesses from using or providing algorithms that process confidential pricing data from multiple sellers to develop pricing strategies for goods, services, or rental properties in California.

The legislation establishes specific parameters for prohibited algorithmic systems, defining them as software or artificial intelligence programs that utilize historical or real-time nonpublic data - such as prices, output levels, customer information, or sales territories - from two or more sellers to generate pricing or rental strategies. Sellers can mount an affirmative defense by demonstrating they conducted due diligence to verify compliance, including direct inquiries to algorithm providers about potential violations.

The Attorney General, city attorneys, and county counsels may pursue civil enforcement actions against violators, with penalties of up to $1,000 per infraction. For algorithm providers, each authorized user constitutes a separate violation, while sellers face penalties for each month of prohibited use. The law applies to businesses selling goods and services to consumers, landlords setting rental rates, and entities operating algorithms on their behalf.