Cartwright Act: violations.

Assembly Member Aguiar-Curry's legislation targets the use of pricing algorithms in California by prohibiting companies from utilizing nonpublic competitor data in automated pricing systems. The measure adds new provisions to the state's Cartwright Act antitrust framework to regulate how businesses deploy algorithms that set or recommend prices and other commercial terms.

The bill establishes two key restrictions on pricing algorithms. First, it prohibits any use of algorithms incorporating nonpublic competitor information, defined as data that is not widely available and comes from companies operating in the same or related markets. Second, it restricts the distribution of algorithms using other data types when multiple entities employ them to set prices within a market. Companies can defend against violations by demonstrating they lacked knowledge of how others used the algorithm.

The legislation also modifies requirements for filing Cartwright Act complaints. Under the new standard, plaintiffs must only present factual allegations making the existence of anti-competitive conduct plausible, rather than having to exclude the possibility of independent action. The bill maintains existing antitrust enforcement authority while adding specific oversight of algorithmic pricing practices that could enable coordinated behavior across competitors.