First look: Klobuchar leads bill on algorithmic price fixing
Sen. Amy Klobuchar and other Democrats are introducing a bill to prevent companies from using algorithms to collude and set higher prices, per an announcement shared first with Axios.
The big picture: Senators are considering how artificial intelligence can affect various industries, including how it may play a part in traditional competition issues.
What they're saying: "Price fixing is illegal under our antitrust laws, but the development of automated price-setting algorithms can create loopholes in current law that could be used to unfairly raise prices on everything from rent to rideshares," Klobuchar said in a release.
- "My bill will strengthen antitrust law and guarantee needed transparency to prevent companies from using algorithms to fix prices to ensure consumers are able to get the full benefits of competition."
Details: The bill, cosponsored by Sens. Ron Wyden, Dick Durbin, Peter Welch, Mazie Hirono and Richard Blumenthal, would:
- Make current law reflect that a price-fixing agreement is in place when competitors share "competitively sensitive information" through an algorithm, something the bill's authors say has already occurred in rental housing.
- Require companies that use algorithms for price-setting to disclose that and let antitrust enforcers audit their algorithm.
- Ban companies from using "competitively sensitive information" from direct competitors for the purpose of training their own algorithm.
- Direct the FTC to study pricing algorithms' impact on competition.
Of note: Wyden and Welch introduced a similar bill this week that would, per a release, "crack down on companies that help landlords increase rents in already high-priced markets" by using software and price-setting algorithms.