California Legislature Passes AB 325 to Crack Down on Corporate Price Fixing, Protecting Consumers and Small Businesses

(SACRAMENTO, CA) — On Friday, September 12, the California State Legislature passed Assembly Bill 325 (AB 325), authored by Majority Leader Cecilia Aguiar-Curry (D-Winters), on assembly concurrence with a 54-18 vote. The bill, which modernizes California’s antitrust laws to address algorithmic price fixing, now heads to Governor Gavin Newsom for consideration.

“I’ve worked closely with Attorney General Bonta, consumer advocates, the business community, and antitrust experts to make sure AB 325 is fair—that it protects innocent business owners and clearly defines when their competitors are cheating—so honest companies can keep competing. Whether you’re sitting in person or using technology, price fixing is cheating. It hurts honest business, California families struggling to make ends meet; frankly it hurts everyone except the cheaters,” said Aguiar-Curry (D-Winters).

AB 325 closes loopholes in California’s Cartwright Act that let corporations use pricing algorithms to secretly coordinate prices, which raise costs for essentials like rent, groceries, and housing. The bill protects independent businesses from coercive pricing, includes safe harbors for small businesses and consumers who unknowingly use these tools. In the senate, amendments were taken to clarify that liability applies only when a business is forced to follow a common pricing algorithm, and to clarify the definition of such algorithms. The adoption of these amendments addressed business concerns which removed the bill from the California Chamber of Commerce Cost Drivers List, and earned support from Attorney General Rob Bonta.

“Across the country, competitors are becoming colluders, using pricing tools to work together to inflate the prices of everything, from housing to healthcare,” said Catherine Bracy, CEO and founder of TechEquity. “Passing AB 325 means companies will no longer be able to hide behind digital tools to break the rules and make the cost of living in California even higher.”

With federal and state enforcement agencies already pursuing cases of algorithmic collusion (using technology to artificially set prices) in housing, food, and hospitality, AB 325 ensures California is equipped to confront these new threats.

“This bill will stop big corporations from using digital tools to collude and drive up costs for our working families and small businesses. As we battle the high cost of living in our state, we can make California more affordable by making sure there’s a fair market, not a rigged market,” concluded Aguiar-Curry.

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