California Passes Broad Limits on Collusion via "Common Pricing Algorithms" (natlawreview.com)

California enacted AB325 on October 6, 2025, banning the use or distribution of a “common pricing algorithm” as part of a contract, trust, or conspiracy to restrain trade and forbidding coercion to adopt prices or other commercial terms recommended by such an algorithm. The law—effective 2026 and implemented by amending the Cartwright Act—defines a common pricing algorithm broadly as any methodology (including software or other technology) used by two or more persons that leverages competitor data to recommend, align, stabilize, set, or otherwise influence price or commercial terms. It also extends beyond price-setting to other contract terms (e.g., lease duration). For AI/ML developers, SaaS pricing vendors, marketplaces, and data aggregators, the statute is significant because it targets shared algorithmic tools and models built on competitor data, without distinguishing public from private data. That means shared models, APIs, or third‑party pricing services that ingest competitor information could fall within the ban; by contrast, purely in‑house proprietary algorithms that recommend prices only for the corporation that developed them appear outside the scope so long as they are not used by multiple parties. Practical enforcement, however, requires a conspiracy or coercion element, so the law may largely align with existing antitrust exposure under the Cartwright Act while opening the door to private suits and increasing legal risk for providers of cross‑customer pricing tools.