Sacramento - This week, Governor Gavin Newsom signed into law Assembly Majority Leader Cecilia Aguiar-Curry’s (D-Winters) AB325, which modernizes California antitrust law to make clear that corporations that collude to fix prices are liable regardless of whether they do so in a smoke-filled room or through an algorithm.
“For more than a hundred years, it has been illegal for businesses to get together and scheme to fix prices," said Ted Mermin, executive director of UC Berkeley Law’s Center for Consumer Law and Economic Justice. “And now it is just as illegal for businesses to delegate the scheming to an algorithm. At a time when families are struggling to make ends meet, this law will help break up conspiracies and keep prices down.”
The Center’s Policy Director, Shelmun Dashan, explained: “Companies that conspire to keep their prices high instead of competing against each other violate the most basic of market principles and harm both consumers and honest businesses.”
AB325 amends California’s primary antitrust law, the Cartwright Act, to ensure that the Act’s prohibition on price fixing extends to collusive methods that rely on algorithms and artificial intelligence. The law also extends liability to the corporations that use or distribute algorithms that enable illegal collusion and adopts a pleading standard that strengthens private and public enforcers’ ability to reach harmful illegal conduct.
“The new law comes at a time when most Americans say they are struggling to keep up with rising bills,” observed Dashan. “Prices that are the result of illegal and exploitative pricing-fixing schemes are illegal and corporations shouldn't be allowed to distort evidence of their wrongdoing through software.”
Berkeley Senior Fellow—and former Acting Assistant Attorney General for the US Department of Justice’s (DOJ) Antitrust Division—Doha Mekki provided crucial testimony1 and expertise in the development of the bill. “These illegal practices are artificially driving up the costs of everything from rent to food to other necessities of life. I am proud of the work we did at DOJ to put an end to algorithmic collusion. And I am grateful to the California legislature for the opportunity to help give California enforcers additional tools to do the same.”
The Center commends Majority Leader Aguiar-Curry and her team, along with the sponsors of the bill, for their vision and dedication in taking this essential step to protect consumers and preserve competition.
1California Senate Judiciary Committee Hearing (July 1, 2025), https://www.senate.ca.gov/media/senate-judiciary-committee-20250701 (Mekki’s remarks at 9:20)