AI Frontier Institute

Regulate the use of pricing algorithms

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Ohio H.B. 665 (introduced, referred to the Technology and Innovation committee, not enacted) would regulate pricing algorithms under Ohio's antitrust law (Revised Code Chapter 1331). If enacted: (1) New section 1331.05(B) would bar any person from using or distributing a pricing algorithm that uses, incorporates, or is trained with nonpublic competitor data. Section 1331.01 would add definitions, including "pricing algorithm" (any computational process, including machine learning or AI, that recommends or sets a price or commercial term), "nonpublic data," and "nonpublic competitor data." Section 1331.04 would make violations of 1331.05 an illegal conspiracy against trade. (2) Section 1331.05(C) would create a court presumption of an agreement or conspiracy against trade when the plaintiff shows the defendant distributed the algorithm to two or more persons, or used it while another person in the same or a related market also used it. Under 1331.05(D), the presumption would not apply to a defendant who did not develop or distribute the algorithm and shows by clear and convincing evidence that it had no actual knowledge and could not reasonably have known that the algorithm used nonpublic competitor data. Section 1331.05(E) would make distributors who knew or reasonably could have known jointly and severally liable in civil cases. (3) Section 1331.16 would extend the attorney general's investigative demand powers to information on the development or distribution of a pricing algorithm. (4) New section 1331.50 would require businesses with $5 million or more in gross receipts that use pricing algorithms to disclose this to customers before purchase and to current or prospective employees and independent contractors. The disclosure must say whether the algorithm sets different prices or terms for similar customers or workers, whether someone else developed it, and who that is. A violation would be an unfair or deceptive act under section 1345.02.

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