IP Law Daily, VITAL BRIEFING: New state AI laws signal increasing scrutiny of pricing practices, (Dec 4, 2025)
Businesses need to be vigilant to ensure compliance with California, New York laws.
California and New York have enacted new laws that are intended to prohibit the use of certain artificial intelligence (AI) or algorithmic devices or services to suppress competition or otherwise harm consumers. California was the first state in the nation to enact into law a measure prohibiting the use of a pricing algorithm as part of a conspiracy to restrain trade. New York followed with its own algorithmic price fixing law focused on housing rents. New York also has enacted the Algorithmic Pricing Disclosure Act, requiring merchants to notify New York consumers when the price of a specific good or service is set using personalized algorithmic pricing, in other words set by an algorithm that uses personal data. While legislation in Colorado was vetoed, new laws in other states will likely follow.
Businesses using AI tools to formulate pricing will need to monitor state legislative activity, as well as comply with the current patchwork of AI laws. They must be aware of the use of algorithms in price setting and be sure to provide proper notice to New York customers under the state’s surveillance pricing law. Moreover, federal and state enforcement actions challenging alleged algorithmic pricing schemes are ongoing. Businesses need to be vigilant to ensure compliance.
Details regarding the new state laws directed at the use of algorithms to set prices are available in this Vital Briefing, titled “New state AI laws signal increasing scrutiny of pricing practices.”
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