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ARTICLE · 20 JANUARY 2026

Algorithmic Pricing Risk: Business Implications From California's New Law And Beyond

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As of January 1, 2026, California's AB 325 fundamentally reshapes the legal landscape for algorithmic pricing.

United StatesAntitrust/Competition Law
Graham H. Ryan
Graham H. Ryan
Jason Loring
Jason Loring
Andrew R. Lee
Andrew R. Lee

As of January 1, 2026, California's AB 325 fundamentally reshapes the legal landscape for algorithmic pricing. By explicitly prohibiting "common pricing algorithms" and dramatically lowering pleading standards, California has created the most comprehensive state-level regulatory framework for algorithmic pricing in the United States. The law will have far-reaching implications for both technology vendors and enterprise users.

The Basics of California's New Algorithmic Pricing Law

Common Pricing Algorithm Prohibition

AB 325 prohibits the use or distribution of a "common pricing algorithm" in two scenarios, either (a) "as part of a contract, combination in the form of a trust, or conspiracy to restrain trade or commerce"; or (b) "if the person coerces another person to set or adopt a recommended price or commercial term recommended by the common pricing algorithm for the same or similar products or services." Section 16729(a) and (b). A "common

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