II 

118TH CONGRESS 

2D SESSION S. 3686 

To prevent anticompetitive conduct through the use of pricing algorithms 

by prohibiting the use of pricing algorithms that can facilitate collusion 

through the use of nonpublic competitor data, creating an antitrust 

law enforcement audit tool, increasing transparency, and enforcing violations through the Sherman Act and Federal Trade Commission Act, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 30, 2024 

Ms. KLOBUCHAR (for herself, Mr. WYDEN, Mr. DURBIN, Mr. BLUMENTHAL, 

Ms. HIRONO, and Mr. WELCH) introduced the following bill; which was 

read twice and referred to the Committee on the Judiciary 

A BILL 

To prevent anticompetitive conduct through the use of pricing algorithms by prohibiting the use of pricing algorithms that can facilitate collusion through the use of 

nonpublic competitor data, creating an antitrust law enforcement audit tool, increasing transparency, and enforcing violations through the Sherman Act and Federal 

Trade Commission Act, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Preventing Algorithmic 

3 Collusion Act of 2024’’. 

4 SEC. 2. DEFINITIONS. 

5 In this Act: 

6 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

7 laws’’— 

8 (A) has the meaning given that term in 

9 subsection (a) of the first section of the Clayton 

10 Act (15 U.S.C. 12); and 

11 (B) includes section 5 of the Federal 

12 Trade Commission Act (15 U.S.C. 45). 

13 (2) COMMERCIAL TERMS.—The term ‘‘commer14 cial terms’’ means— 

15 (A) level of service; 

16 (B) availability; 

17 (C) output, including quantities of prod18 ucts produced or distributed or the amount or 

19 level of service provided; or 

20 (D) rebates or discounts made available. 

21 (3) COMMISSION.—The term ‘‘Commission’’ 

22 means the Federal Trade Commission. 

23 (4) DISTRIBUTE; DISTRIBUTION; DISTRIB24 UTING.—The terms ‘‘distribute’’, ‘‘distribution’’, and 

25 ‘‘distributing’’ include selling, licensing, providing 

26 access to, or otherwise making available by any 


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1 means, including through a subscription or the sale 

2 of a service. 

3 (5) NONPUBLIC COMPETITOR DATA.—The term 

4 ‘‘nonpublic competitor data’’— 

5 (A) means nonpublic data that is derived 

6 from or otherwise provided by another person 

7 that competes in the same market as a person, 

8 or a related market; and 

9 (B) does not include information distrib10 uted, reported, or otherwise communicated in a 

11 way that does not reveal any underlying data 

12 from a competitor, such as narrative industry 

13 reports, news reports, business commentaries, 

14 or generalized industry survey results. 

15 (6) NONPUBLIC DATA.—The term ‘‘nonpublic 

16 data’’ means information that is not widely available 

17 or easily accessible to the public, including informa18 tion about price, commercial terms, and related 

19 products or services, regardless of whether the data 

20 is attributable to a specific competitor or 

21 anonymized. 

22 (7) PERSON.—The term ‘‘person’’ has the 

23 meaning given that term in subsection (a) of the 

24 first section of the Clayton Act (15 U.S.C. 12). 


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1 (8) PRICE.—The term ‘‘price’’ means the 

2 amount of money or other thing of value, whether 

3 tangible or not, expected, required, or given in pay4 ment for any product or service, including com5 pensation paid to an employee or independent con6 tractor for services provided. 

7 (9) PRICING ALGORITHM.—The term ‘‘pricing 

8 algorithm’’ means any computational process, in9 cluding a computational process derived from ma10 chine learning or other artificial intelligence tech11 niques, that processes data to recommend or set a 

12 price or commercial term that is in or affecting 

13 interstate or foreign commerce. 

14 SEC. 3. COMPETITION LAW ENFORCEMENT AUDIT. 

15 (a) IN GENERAL.—A person using or distributing a 

16 pricing algorithm, upon a written request by the Attorney 

17 General or the Commission, shall, not later than 30 days 

18 after the date of the written request, or any later date 

19 approved by the Attorney General or the Commission, re20 spectively, provide to the Attorney General or the Commis21 sion, respectively, a written report on each pricing algo22 rithm identified in the request. 

23 (b) REPORT CONTENTS.—Each report under sub24 section (a) shall include— 


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1 (1) information on whether the person is re2 sponsible for the development or distribution of the 

3 pricing algorithm, or whether a third party is re4 sponsible for the development or distribution of the 

5 pricing algorithm, including the identity and contact 

6 information of any other person responsible for the 

7 development or distribution of the pricing algorithm; 

8 (2) information on whether the pricing algo9 rithm autonomously sets prices or commercial terms 

10 and whether there is human review of any rec11 ommendation or decision of the pricing algorithm; 

12 (3) an explanation of the rules or processes that 

13 the pricing algorithm uses to set or recommend 

14 prices or commercial terms; 

15 (4) a description of all data the pricing algo16 rithm uses to set or recommend prices or commer17 cial terms, including data used to train the algo18 rithm; 

19 (5) all sources and collection processes, includ20 ing the frequency of collection, of any data that the 

21 pricing algorithm uses to set or recommend prices or 

22 commercial terms; 

23 (6) whether the pricing algorithm engages in 

24 price discrimination by setting or recommending dif25 ferent prices or commercial terms for— 


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1 (A) different customers seeking identical or 

2 nearly identical products or services, and if so, 

3 the factors used in differentiating among such 

4 customers; or 

5 (B) different employees or independent 

6 contractors providing substantially similar serv7 ices, and if so, the factors used in differen8 tiating among such employees or independent 

9 contractors; and 

10 (7) any changes made to the pricing algorithm 

11 between the date of receipt of the request under sub12 section (a) and the date of certification under sub13 section (c). 

14 (c) CERTIFICATION OF REPORT.—The Chief Execu15 tive Officer, Chief Economist, Chief Technology Officer, 

16 or a corporate officer of similar authority of a person shall 

17 certify, under penalty of perjury, the accuracy of a report 

18 under subsection (a) submitted by the person. 

19 (d) CONFIDENTIALITY.—All information submitted 

20 in a report under subsection (a) shall be treated as con21 fidential and shall be considered to be privileged and con22 fidential trade secrets and commercial or financial infor23 mation exempt under subsection (b)(4) of section 552 of 

24 title 5, United States Code, from being made available to 

25 the public under subsection (a) of that section. 


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1 (e) INFORMATION SHARING.— 

2 (1) IN GENERAL.—A report under subsection 

3 (a) may be shared— 

4 (A) between the Department of Justice 

5 and the Commission; and 

6 (B) with the National Institute of Stand7 ards and Technology for technical assistance in 

8 understanding the report. 

9 (2) LIMITATION.—The National Institute of 

10 Standards and Technology shall not disclose the con11 tents of a report shared under paragraph (1) or the 

12 analysis of the report by the National Institute of 

13 Standards and Technology to any person, except the 

14 Department of Justice or Commission, whichever 

15 sought the technical assistance. 

16 (f) RULES OF CONSTRUCTION.—Nothing in this sec17 tion shall— 

18 (1) limit the ability of the Commission or the 

19 Attorney General to issue a civil investigative de20 mand, to issue a subpoena, to seek discovery in the 

21 course of litigation, or otherwise obtain information 

22 through other means available to the Commission or 

23 the Attorney General; or 

24 (2) restrict the use of information submitted in 

25 a report under subsection (a) in the course of a forVerDate Sep 11 2014 23:10 Feb 01, 2024 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3686.IS S3686

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1 mal investigation, enforcement action, litigation, 

2 trial, or other proceeding, in accordance with the 

3 confidentiality procedures applicable to such pro4 ceeding. 

5 SEC. 4. PREVENTING COLLUSIVE ACTIVITY IN PRICING AL6 GORITHMS. 

7 (a) IN GENERAL.—It shall be unlawful for a person 

8 to use or distribute any pricing algorithm that uses, incor9 porates, or was trained with nonpublic competitor data. 

10 (b) CIVIL ACTION.—If the Commission or the Attor11 ney General has reason to believe that a person has vio12 lated subsection (a), the Commission, in its own name by 

13 any of its attorneys designated by it for such purpose, or 

14 the Attorney General may bring a civil action against the 

15 person in an appropriate district court of the United 

16 States to seek to recover— 

17 (1) a civil penalty of— 

18 (A) not less than $10,000, adjusted for in19 flation on the basis of the Consumer Price 

20 Index, for each day during which the violation 

21 occurs or continues to occur; or 

22 (B) the sum of the price of each product 

23 or service sold using the pricing algorithm in 

24 violation of subsection (a); and 


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1 (2) other appropriate relief, including an in2 junction or other equitable relief. 

3 (c) EFFECTIVE DATE.—Subsection (a) shall take ef4 fect on the date that is 90 days after the date of enact5 ment of this Act. 

6 SEC. 5. ALGORITHMIC PRICE FIXING. 

7 (a) PRESUMPTION OF AGREEMENT.—With respect to 

8 the use of a pricing algorithm that would violate section 

9 4 of this Act, there shall be a presumption for purposes 

10 of section 1 of the Sherman Act (15 U.S.C. 1) that the 

11 defendant entered into an agreement, contract, combina12 tion, or conspiracy in restraint of trade and for purposes 

13 of section 5(a) of the Federal Trade Commission Act (15 

14 U.S.C. 45(a)) that the defendant has engaged in an unfair 

15 method of competition if the plaintiff establishes that— 

16 (1) the defendant distributed the pricing algo17 rithm to 2 or more persons— 

18 (A) with the intent that the pricing algo19 rithm be used to set or recommend a price or 

20 commercial term of a product or service in the 

21 same market or a related market; or 

22 (B) and 2 or more persons used the pric23 ing algorithm to set or recommend a price or 

24 commercial term of a product or service in the 

25 same market or a related market; or 


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1 (2)(A) the defendant used the pricing algorithm 

2 to set or recommend a price or commercial term of 

3 a product or service; and 

4 (B) the pricing algorithm was used by another 

5 person to set or recommend a price or commercial 

6 term of a product or service in the same market or 

7 a related market. 

8 (b) REBUTTAL.—The presumption under subsection 

9 (a) shall not apply to a defendant if the defendant did 

10 not develop or distribute the pricing algorithm and the de11 fendant demonstrates by clear and convincing evidence 

12 that the defendant did not have actual knowledge or could 

13 not have reasonably known that the pricing algorithm used 

14 nonpublic competitor data. 

15 (c) JOINT AND SEVERAL LIABILITY.—In a civil case 

16 in which the presumption under subsection (a) is applica17 ble, any persons that distributed the pricing algorithm and 

18 knew, or could reasonably have known, that the pricing 

19 algorithm would use, incorporate, or be trained with non20 public competitor data shall be jointly and severally liable 

21 for any violation of section 1 of the Sherman Act (15 

22 U.S.C. 1) or section 5(a) of the Federal Trade Commis23 sion Act (15 U.S.C. 45(a)). 


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1 (d) RELATION TO ANTITRUST LAWS.—Nothing in 

2 this section shall impair or limit the applicability of the 

3 antitrust laws. 

4 (e) EFFECTIVE DATE.—Subsection (a) shall take ef5 fect on the date that is 90 days after the date of enact6 ment of this Act. 

7 SEC. 6. TRANSPARENCY IN PRICING ALGORITHMS. 

8 (a) IN GENERAL.—Any person that has $5,000,000 

9 or more in annual revenue that uses a pricing algorithm 

10 to recommend or set a price or commercial term shall 

11 clearly disclose, as applicable— 

12 (1) to a customer, before the customer pur13 chases the relevant product or service, that the price 

14 or a commercial term, as applicable, is set or rec15 ommended by a pricing algorithm; and 

16 (2) to a current or prospective employee or 

17 independent contractor that the price or a commer18 cial term for services rendered as an employee or 

19 independent contractor is set or recommended by a 

20 pricing algorithm. 

21 (b) ADDITIONAL DISCLOSURES.— 

22 (1) PRICE DISCRIMINATION.—If applicable, a 

23 disclosure under subsection (a) shall state that the 

24 pricing algorithm sets or recommends different 

25 prices or commercial terms for— 


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1 (A) different customers seeking identical or 

2 nearly identical products or services; or 

3 (B) employees or independent contractors 

4 providing substantially similar services. 

5 (2) THIRD-PARTY ALGORITHM.—If applicable, a 

6 disclosure under subsection (a) shall— 

7 (A) state that the pricing algorithm was 

8 developed or distributed by a person other than 

9 the person making the disclosure; and 

10 (B) provide the identity of the person that 

11 developed or distributed the pricing algorithm. 

12 (c) ENFORCEMENT.—Failure to provide a disclosure 

13 under subsection (a), including the information required 

14 under subsection (b), shall constitute an unfair or decep15 tive act or practice under section 5 of the Federal Trade 

16 Commission Act (15 U.S.C. 45). 

17 (d) CIVIL ACTION.—If the Commission has reason to 

18 believe that a person has violated subsection (a) or (b), 

19 the Commission, in its own name by any of its attorneys 

20 designated by it for such purpose, may bring a civil action 

21 in an appropriate district court of the United States to 

22 recover— 

23 (1) a civil penalty of not less than $5,000, ad24 justed for inflation on the basis of the Consumer 


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1 Price Index, for each day during which the violation 

2 occurs or continues to occur; and 

3 (2) other appropriate relief, including an in4 junction or other equitable relief. 

5 (e) RELATION TO ANTITRUST LAWS.—Nothing in 

6 this section shall impair or limit the applicability of the 

7 antitrust laws. 

8 SEC. 7. FTC STUDY. 

9 Not later than 2 years after the date of enactment 

10 of this Act, the Commission shall publish the results of 

11 a study of the use of pricing algorithms, including infor12 mation on— 

13 (1) the prevalence of pricing algorithms; 

14 (2) the frequency of the use of pricing algo15 rithms to engage in price or wage discrimination; 

16 (3) the potential for persons to use pricing algo17 rithms to engage in behavior that increases prices, 

18 lowers wages, reduces output, lowers quality, deters 

19 innovation, or otherwise harms the competitive proc20 ess outside of the price fixing context; 

21 (4) the potential benefits or efficiencies of pric22 ing algorithms; 

23 (5) any industries, sectors, or markets in which 

24 pricing algorithms may warrant additional oversight 


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1 or regulation to protect competition and consumers; 

2 and 

3 (6) recommendations for additional legislation, 

4 regulation, or rulemaking relating to competition 

5 and consumer protection issues arising from the use 

6 of pricing algorithms. 

Æ 


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