SB 1154

Bill Subjects

Abstract

Existing law establishes the Attorney General as the head of the Department of Justice, with charge of all legal matters in which the state is interested, except as specified. Existing law imposes various requirements on the Attorney General related to consumer protection, including, among others, the supervision of charitable trusts and the enforcement of antitrust laws. Existing law, commonly known as the Cartwright Act, identifies certain acts that are unlawful restraints of trade and unlawful trusts and prescribes provisions for its enforcement through civil actions. This bill, the California Preventing Algorithmic Collusion Act of 2024 (the act) , would require a person, as defined, upon request of the Attorney General, to provide to the Attorney General a written report, as specified, on each pricing algorithm, as defined, identified in the request. The act would require that all information submitted in a report under these provisions be treated as confidential and be considered privileged and confidential trade secrets exempt from disclosure under the California Public Records Act. The act would authorize the Attorney General to share the report with the National Institute of Standards and Technology for technical assistance in understanding the report, as specified. This act would prohibit a person from using or distributing any pricing algorithm that uses, incorporates, or was trained with nonpublic competitor data, as defined. If the Attorney General has reason to believe that a person has violated these provisions, the act would authorize the Attorney General to bring a civil action against the person in any court of competent jurisdiction in this state, as specified. The act would provide that certain presumptions are established as applicable, including that the defendant entered into a contract in restraint of trade, as specified, if the Attorney General establishes any of specified requirements, including that the defendant distributed the pricing algorithm to 2 or more persons with the intent that the pricing algorithm be used to set or recommend a price, as defined, or commercial term, as defined, of a product or service in the same market or a related market and 2 or more persons used the pricing algorithm to set or recommend a price or commercial term of a product or service. This act would require a person that has $5,000,000 or more in annual revenue that uses a pricing algorithm to recommend or set a price or commercial term to make certain disclosures, as specified, including to a customer, before the customer purchases the relevant product or service, that the price or a commercial term is set or recommended by a pricing algorithm. The act would provide that failure to comply with these disclosure provisions constitutes an unfair trade practice, as specified. If the Attorney General has reason to believe that a person has violated these disclosure provisions, the act authorizes the Attorney General to bring a civil action against the person in any court of competent jurisdiction in this state, as specified. Existing law establishes the Governor's Office of Business and Economic Development (GO-Biz) , which serves the Governor as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. Existing law establishes the Department of Financial Protection and Innovation in the Business, Consumer Services, and Housing Agency, headed by the Commissioner of Financial Protection and Innovation. Under existing law, the department has charge of the execution of specified laws relating to various financial institutions and financial services. Existing law requires the commissioner to publish on the department's internet website an annual report detailing actions taken during the prior year, including, among others, recommendations intended to result in improved oversight, greater transparency, or increased availability of beneficial financial products and services in the marketplace. This act would require, on or before January 1, 2027, the office of the Attorney General to publish on its internet website, and notify the Legislature of the publication of, the results of a study conducted in collaboration with GO-Biz and the Department of Financial Protection and Innovation on the use of pricing algorithms using, incorporating, or trained with either or both public and nonpublic data, as specified, including, among other information, the prevalence of pricing algorithms. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect.