Bill Text: CA SB1154 | 2023-2024 | Regular Session | Amended
Bill Title: California Preventing Algorithmic Collusion Act of 2024.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced) 2024-04-17 - Set for hearing April 23. [SB1154 Detail]
Download: California-2023-SB1154-Amended.html
Amended
IN
Senate
March 18, 2024 |
Introduced by Senator Hurtado (Coauthors: Senators Archuleta and Cortese) |
February 14, 2024 |
LEGISLATIVE COUNSEL'S DIGEST
Existing
This bill would, commencing January 1, 2026, and every two years thereafter, require the Attorney General, in collaboration with the Department of Financial Protection and Innovation, to submit a report to the
Legislature on the progress of emerging markets in California, as specified. The bill would make the report requirement inoperative on January 1, 2030, and would make related findings and declarations.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Chapter 8 (commencing with Section 17370) is added to Part 2 of Division 7 of the Business and Professions Code, to read:CHAPTER 8. California Preventing Algorithmic Collusion Act of 2024
17370.
This chapter shall be known, and may be cited, as the “California Preventing Algorithmic Collusion Act of 2024.”17371.
For purposes of this chapter, the following definitions apply:17372.
(a) Upon written request by the Attorney General, a person shall, no later than 30 days after the date of the written request or any later date approved by the Attorney General, provide to the Attorney General a written report on each pricing algorithm identified in the request.17373.
(a) A person shall not use or distribute any pricing algorithm that uses, incorporates, or was trained with nonpublic competitor data.17374.
(a) If the Attorney General meets the requirements of subdivision (b), there shall be, as applicable, the following presumptions:17375.
(a) A person that has five million dollars ($5,000,000) or more in annual revenue that uses a pricing algorithm to recommend or set a price or commercial term shall make, in a clear manner, the following disclosures:17376.
On or before January 1, 2027, notwithstanding Section 10231.5 of the Government Code, the office of the Attorney General shall publish on its internet website, and notify the Legislature of the publication of, the results of a study conducted in collaboration with the Governor’s Office of Business and Economic Development and the Department of Financial Protection and Innovation on the use of pricing algorithms using, incorporating, or trained with either or both public and nonpublic data, including the following information:SEC. 2.
The Legislature finds and declares that Section 1 of this act, which adds Chapter 8 (commencing with Section 17370) to Part 2 of Division 7 of the Business and Professions Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:The Legislature finds and declares:
(a)California’s economy is dynamic and diverse, with emerging markets playing a significant role in contributing to the state’s economic growth and development.
(b)The state recognizes the importance of safeguarding consumers in emerging markets where novel products and services may pose unique risks. A thorough understanding of these markets is essential to establish robust
consumer protection measures.
(c)Emerging markets often witness the introduction of new brands and trademarks. Studying these markets is imperative to maintain the integrity of trademark systems, prevent infringement, and ensure fair competition among businesses.
(d)California serves as an innovation hub, fostering the growth of emerging technologies and industries. Studying emerging markets within the state is essential to stay abreast of technological advancements and protect intellectual property rights.
(e)Emerging markets provide unique opportunities for small businesses and startups. Understanding these markets is essential for creating a supportive environment that encourages entrepreneurship and sustainable
growth.
(f)The fluid nature of emerging markets demands continuous study to comprehend market dynamics, identify potential risks, and establish effective risk management strategies to protect businesses and consumers alike.
(g)Recognizing the critical importance of data security, California acknowledges the necessity to protect consumer data from unauthorized use, theft, and exploitation by entities. Emerging markets may pose increased risks of data vulnerabilities, requiring proactive measures to safeguard sensitive information.
(h)California is committed to preventing scenarios where consumer data is stolen and sold overseas, potentially allowing other countries to gain insights into the state’s needs and vulnerabilities.
That exploitation undermines California’s sovereignty and necessitates stringent measures to prevent unauthorized access and data transfer.
(i)California aims to counteract situations where data stolen from the state is sold back by other countries, enabling them to influence or manipulate local markets. Stringent regulations and international cooperation are essential to prevent such practices and maintain control over the state’s data.
(a)Commencing January 1, 2026, and every two years thereafter, the Attorney General, in collaboration with the Department of Financial Protection and Innovation, shall submit a report to the Legislature on the progress of emerging markets in California. The report shall include information on all of the following:
(1)Data governance and security, including an assessment of data governance practices within emerging markets, addressing issues related to data security and preventing unauthorized use or exploitation of consumer data.
(2)Anticompetitive practices, including an examination of potential
anticompetitive practices within emerging markets with consideration given to the impact of data sharing and roll-up strategies on competition, output, and pricing.
(3)Consumer protection measures, including an overview of measures taken to protect consumers within emerging markets, including safeguards against fraud, misinformation, and other risks associated with novel products and services.
(4)Small business support and innovation, including an evaluation of initiatives supporting the growth of small businesses and startups in emerging markets and an assessment of the impact of data practices on fostering innovation.
(5)Equity considerations, including an analysis of policies and programs designed to promote equity
within emerging markets, ensuring that economic benefits are distributed equitably across diverse communities and demographic groups.
(6)Federal collaboration, including an overview of collaboration with federal partners to establish global data protection standards applicable to emerging markets.
(7)Roll-up strategies oversight, including an examination of roll-up strategies, particularly those involving private equity firms or strategic buyers, with a focus on monitoring and enforcing potentially anticompetitive roll-ups. Consideration of prior notice and approval requirements for future transactions in consent orders.
(b)(1)The requirement for submitting a report imposed under subdivision
(a) is inoperative on January 1, 2030, pursuant to Section 10231.5 of the Government Code.
(2)A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.