New Laws Regulating Algorithmic Pricing Enacted In New York And California

Two states have passed new laws that make it illegal in certain circumstances to use pricing algorithms that include competitor information as inputs. California Assembly Bill 325 applies broadly, and New York Assembly Bill A1417B is limited to rental landlords. These new laws are examples of state legislatures nationwide focusing on competitor coordination through pricing algorithms.

Introduction

The last few years have seen a surge in litigation focusing on pricing algorithms. These cases involve allegations that competitors' use of revenue management software facilitates price-fixing and coordination by providing pricing recommendations to software users. The earliest of these cases involved residential rentals—but cases have focused on other sectors as well, including hotels and health insurance. None of these cases has yet proceeded to trial and there are only a few decisions on motions to dismiss (and even fewer summary judgment decisions). The outcomes of