SB 295

Summary

As amended on 9/2/2025: - Prohibits a person from distributing or making recommendations based on the use of a pricing algorithm to two or more competitors, if the person knows or should have known that the pricing algorithm processes competitor data. - Prohibits a person from using the recommendation of a pricing algorithm that processes competitor data, if the person has actual knowledge that the pricing algorithm uses or incorporates competitor data. - Modifies the definition of a "person" to include any insurer subject to Article 10, Chapter 9, Part 2 of Division 1 of the Insurance Code and exempts any advisory organization subject to Article 4 Chapter 9, Part 2 of Division 1 of the Insurance Code. - Modifies the definition of "competitors" to mean two or more businesses that offer a similar good, commodity, product, rental property, or service in the same market to the same customer base. - Establishes an affirmative defense to liability under this prohibition for a person who demonstrates by a preponderance of evidence that they exercised reasonable due diligence before using the recommendations of a pricing algorithm. - Specifies when the use, recommendation, or distribution of a pricing algorithm constitutes separate violations. - Provisions do not apply to the distribution or use of a pricing algorithm if all of the competitor data processed by the pricing algorithm was collected more than one year before the use or distribution of the pricing algorithm. - Authorizes the Attorney General or a district attorney to bring a civil action for a violation to seek restitution, punitive damages, a civil penalty of up to $25,000 per violation, and other appropriate relief. - Requires a person to, upon request from the Attorney General, to provide information related to pricing algorithms. - Exempts the development, distribution, output, or use of a credit score or computational tool either subject to specified law or provided by a commercial credit reporting agency. - NOTE: 5/5 amendment adds language clarifying a person must have "actual knowledge the pricing algorithm uses or incorporates competitor data." Modifies the civil penalties. Removes pricing algorithm disclosure requirements for individuals above an annual revenue limit of $5 million. - NOTE: 6/27 amendment authorizes an attorney to bring a civil action for 3 times the actual damages from the violation. - NOTE: 7/14 amendment establishes an affirmative defense to liability, specifies what constitutes separate offenses, and modifies civil penalties to add restitution, punitive damages, and a maximum fine of $25,000 per violation. - NOTE: 9/2 amendment amends the definition of "person" and "competitors." The amended version clarifies that the provisions do not apply to the development, distribution, output, or use of a credit score or other computational tool either subject to the Fair Credit Reporting Act or provided by a commercial credit reporting agency.

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