WASHINGTON - U.S. Senator Amy Klobuchar (D-MN), joined by Senators Ron Wyden (D-OR), Dick Durbin (D-IL), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), Ben Ray Luján (D-NM), Chris Murphy (D-CT), Jeanne Shaheen (D-NH), and Peter Welch (D-VT), introduced the Preventing Algorithmic Collusion Act to prevent companies from using algorithms to collude to set higher prices. As recent reporting, a Justice Department lawsuit, and multiple private lawsuits have shown, big corporations are using algorithms to raise prices and limit competition, including companies like RealPage that have facilitated collusion to increase rents by more than $3 billion in 2023 alone. This legislation will make such collusion illegal to lower costs for families and support small businesses.

“Price fixing is illegal under our antitrust laws, but the development of price-setting algorithms can exploit loopholes that could be used to unfairly raise prices on everything from rent to rideshares,” said Klobuchar. “My bill will strengthen antitrust law and guarantee needed transparency to prevent companies from using algorithms to fix prices to ensure consumers are able to get the full benefits of competition.” 

“Collusion is collusion, whether you do it over the phone or using an algorithm. This legislation, along with my End Rent Fixing Act, will send a strong message to corporations that they won’t get away with coordinating to ratchet up prices on consumers,” said Wyden.

“Businesses are increasingly turning to algorithms to determine pricing for their products.  In a technology-based world, we need to prevent businesses from using these tools to reduce competition,” said Durbin.  “That’s why I’m joining my colleagues in introducing the Preventing Algorithmic Collusion Act, which would ensure that pricing algorithms aren’t being used to take advantage of consumers and inflate prices.”

“Predatory algorithms significantly suppress competition in today's markets and allow companies to collude to raise prices to unaffordable levels. The Preventing Algorithmic Collusion Act will eliminate coercive anticompetitive software and empower consumers,” said Blumenthal.

“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,” said Hirono. “This legislation will help to ensure transparent competition on price, prevent big business from manipulating the market, encourage healthy competition, and protect consumers and small businesses from being taken advantage of.”

“Far too many companies are utilizing predatory pricing algorithms that prevent competition and raise prices for consumers,” said Luján. “I’m proud to join my colleagues in reintroducing the Preventing Algorithmic Collusion Act to increase transparency and prevent companies from taking advantage of consumers. I look forward to working with my colleagues to get this bill signed into law.”

"These pricing algorithms are just one more tactic corporations use to get around the law and screw regular people. It’s how the poultry industry colludes to keep the price of chicken high,” said Murphy. “If we really care about lowering costs and disrupting the corrupt status quo, this is the kind of bill that Congress should pass.”

“I’m proud to join my colleagues in introducing this bill to strengthen competition, increase transparency and prevent big corporations from secretly working together to raise rent and other prices on everyday consumers through predatory algorithms,” said Shaheen.

“Transparency is a key tenet of doing good business, and consumers expect businesses to treat them fairly. But increasingly we've seen competitors throw antitrust laws to the wind by using pricing algorithms to avoid competition, leaving consumers to suffer the consequences. The Preventing Algorithmic Collusion Act works to close existing loopholes and increase transparency around how companies use pricing algorithms to make sure consumers aren’t getting a raw deal,” said Welch.

Price fixing and other forms of collusion are illegal under current antitrust laws. However, current antitrust laws may be insufficient when competing companies delegate their pricing decisions to an algorithm without agreeing to fix prices. Current law requires proof of an agreement to fix prices before condemning the conduct. When pricing decisions of multiple competitors are delegated to a single algorithm, that agreement may not exist even though the use of the algorithm may have the same effect as a traditional agreement to fix prices. This type of conduct has already occurred in rental housing, and we must ensure that it does not spread to other sectors of our economy with the proliferation of algorithmic pricing.  

To strengthen current price fixing law, this legislation will:

  • Close a loophole in current law by presuming a price-fixing “agreement,” when direct competitors share non-public information through a pricing algorithm to raise prices;
  • Increase transparency by requiring companies that use algorithms to set prices to disclose that fact and give antitrust enforcers the ability to audit the pricing algorithm when there are concerns it may be harming consumers;
  • Ban companies from using non-public, competitively sensitive information from their direct competitors to inform or train a pricing algorithm;
  • Direct the Federal Trade Commission (FTC) to study pricing algorithms’ impact on competition. 

The Preventing Algorithmic Collusion Act is endorsed by Consumer Reports, the Open Markets Institute, and Accountable.US. 

Klobuchar has long led efforts to update our competition laws. As Chair of the Competition Policy, Antitrust and Consumer Rights subcommittee, Klobuchar held two hearings in 2023 exploring how algorithms can be used to harm consumers. In November 2022, Klobuchar, along with Senators Durbin and Booker, urged the Department of Justice to investigate potential anticompetitive conduct by Realpage increasing rents. Klobuchar leads the bipartisan American Innovation and Choice Online Act with Senator Chuck Grassley (R-IA), which would prevent technology companies from abusing their market power to harm competition, and which made history as the first digital competition bill to advance in Congress since the dawn of the internet when it passed the Senate Judiciary Committee with a 16-6 vote in 2022. Last month, Klobuchar reintroduced the Competition and Antitrust Law Enforcement Reform Act with 13 co-sponsors to give federal antitrust enforcers the resources they need to do their jobs and strengthen prohibitions on anticompetitive conduct and mergers. In 2024, Klobuchar joined Senator Wyden in introducing the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act to ensure that large landlords cannot skirt antitrust law and collude to increase rent prices across the country.

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