H.R. 4640: Stop AI Price Gouging and Wage Fixing Act of 2025

This bill, known as the Stop AI Price Gouging and Wage Fixing Act of 2025, aims to regulate the use of algorithmic decision systems in setting prices and wages based on surveillance data. The key provisions of the bill can be summarized as follows:

Prohibition on Surveillance-Based Price Setting

The legislation prohibits businesses from using surveillance data to determine personalized prices for products or services. However, there are exceptions where variations in pricing are permissible. For example:

• If different prices are based on actual costs of providing the service or product.
• If discounts are offered to groups such as veterans or students based on openly available criteria.
• If discounts are part of loyalty or membership programs to which consumers have opted in.

To comply with these exceptions, businesses must:

• Clearly disclose eligibility criteria for discounts.
• Apply discounts uniformly within qualifying groups.
• Limit the use of surveillance data to administering these discounts without profiling or individualized pricing.

Furthermore, businesses intending to use such systems are required to publish procedures that ensure data accuracy, allow consumers to challenge data accuracy, and inform consumers how their data influences pricing decisions at least 180 days prior to implementation.

Enforcement

The Federal Trade Commission (FTC) will be responsible for enforcing these provisions, treating violations as unfair or deceptive practices under existing laws. The FTC will have the same authority and enforcement capabilities as it does under the Federal Trade Commission Act.

Prohibition on Surveillance-Based Wage Setting

The bill also prohibits using surveillance data to set wages. Exceptions exist if wage-setting systems only consider geographical cost-of-living data without incorporating broader surveillance data. Employers must publish procedures regarding the data considered for wage determination and allow employees to challenge and correct data inaccuracies.

Enforcement by the Equal Employment Opportunity Commission (EEOC)

The EEOC will be empowered to initiate civil actions against employers who violate provisions related to wage setting, including seeking damages, penalties, and equitable relief.

Actions by States and Private Right of Action

State attorneys general can bring actions on behalf of residents if they believe their interests are affected by violations of the surveillance-based pricing or wage-setting regulations. Individuals harmed by violations can also bring lawsuits seeking compensatory damages or penalties.

Definitions

Key definitions in the legislation include:

• Automated decision system: Systems that assist in decision-making through machine learning or similar technologies.
• Surveillance data: Information gathered through observation or inference related to an individual, which may include personal or genetic information.

Preemption and Preservation of Rights

The bill does not preempt state laws providing greater consumer protections regarding surveillance-based pricing or wage-setting. It also recognizes the rights of employees to bargain collectively for better terms and conditions related to surveillance in the workplace.

Relevant Companies

None found.