H.R. 4640

119th CONGRESS 1st Session

To prohibit certain uses of algorithmic decision systems to inform individualized prices and wages, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · July 23, 2025 · Sponsor: Mr. Casar

Table of contents

• H.R. 4640
  • SEC. 1. Short title
  • SEC. 2. Prohibition on surveillance-based price setting
  • SEC. 3. Prohibition on surveillance-based wage setting
  • SEC. 4. Preemption of directly conflicting State laws
  • SEC. 5. Preservation of collective bargaining rights

SEC. 1. Short title

• This Act may be cited as the Stop AI Price Gouging and Wage Fixing Act of 2025.

SEC. 2. Prohibition on surveillance-based price setting

• (a) Surveillance-Based price setting
  • (1) General prohibition
    • A person may not engage in surveillance-based price setting. If each condition in paragraph (2) is met, any of the following is not surveillance-based price setting:
      • A difference in price is based solely on reasonable costs associated with providing the good or service to different consumers.
      • A discounted price is offered to members of a broadly defined group, including teachers, veterans, senior citizens, or students, based on publicly disclosed eligibility criteria.
      • A discounted price is offered through a loyalty, membership, or rewards program that consumers affirmatively enrolled in, including signing up for a mailing list, registering for promotional communication, or participating in a promotional event.
  • (2) Additional conditions for exception
    • The conditions in this paragraph are the following:
      • Any eligibility criteria or condition for receiving or earning the discount or reward is clearly and conspicuously disclosed.
      • Any discount or reward is offered uniformly to all consumers who meet the disclosed eligibility criteria.
      • Any surveillance data is used solely to offer or administer the discount or reward and is not used for any other purpose, including profiling, targeted advertising, or individualized price setting.
  • (3) Requirement to publish procedures
    • Not later than 180 days before the date on which a person intends to engage in any of the actions described in subparagraphs (A) through (C) of paragraph (1), that person shall make publicly available, in a conspicuous and accessible format, reasonable procedures that include the following:
      • A process for ensuring the accuracy of all data considered by the automated decision system.
      • A procedure that allows a consumer to correct or challenge the accuracy of data considered by the automated decision system.
      • Disclosure to consumers what data is considered and how automated decision-making considers the data when setting particular prices.
• (b) Enforcement by Federal Trade Commission
  • (1) Unfair or deceptive acts or practices; Unfair methods of competition
    • A violation of subsection (a) or a regulation promulgated under such subsection shall be treated as a violation of a regulation under section 18(a)(1)(B) of the () regarding unfair or deceptive acts or practices and as a violation of the Federal Trade Commission Act () regarding unfair methods of competition. 15 U.S.C. 57a(a)(1)(B); 15 U.S.C. 45(a)
  • (2) Powers of Commission
    • The Federal Trade Commission shall enforce subsection (a) and any regulation promulgated under such subsection in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the () were incorporated into and made a part of this Act. Any person who violates such subsection or a regulation promulgated under such subsection shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act. 15 U.S.C. 41 et seq.
  • (3) Common carriers and nonprofit organizations
    • Notwithstanding section 4, 5(a)(2), or 6 of the Federal Trade Commission Act (; 45(a)(2); 46) or any jurisdictional limitation of the Federal Trade Commission, the Federal Trade Commission shall also enforce subsection (a) or a regulation promulgated under subsection (a), in the same manner provided in paragraphs (1) and (2), with respect to— 15 U.S.C. 44
      • common carriers subject to the Communications Act of 1934 () and all Acts amendatory thereof and supplementary thereto; and 47 U.S.C. 151 et seq.
      • organizations not organized to carry on business for their own profit or that of their members.
  • (4) Authority preserved
    • Nothing in this Act may be construed to limit the authority of the Commission under any other provision of law.
• (c) Actions by States
  • (1) In general
    • In any case in which the attorney general of a State, or an official or agency of a State, has reason to believe that an interest of the residents of such State has been or is threatened or adversely affected by an act or practice in violation of subsection (a) or a regulation promulgated under such subsection, the State, as parens patriae, may bring a civil action on behalf of the residents of the State in an appropriate State court or an appropriate district court of the United States to—
      • enjoin such act or practice;
      • enforce compliance with such subsection or such regulation;
      • obtain, per violation, the greater of—
        • (i) the actual monetary damages incurred from the violation; or
        • (ii) $3,000; or
      • obtain any restitution, penalties, and any other legal or equitable relief on behalf of residents as the court may deem just and proper.
  • (2) Rule of construction
    • For purposes of bringing a civil action under this subsection, nothing in this Act shall be construed to prevent an attorney general, official, or agency of a State from exercising the powers conferred on the attorney general, official, or agency by the laws of such State to conduct investigations, administer oaths and affirmations, or compel the attendance of witnesses or the production of documentary and other evidence.
• (d) Private right of action
  • (1) In general
    • A person injured by an act or practice in violation of subsection (a) or a regulation promulgated under such subsection may bring in an appropriate State court or an appropriate district court of the United States—
      • to enjoin the violation;
      • to obtain, for each violation, the greater of—
        • (i) the actual monetary damages incurred from the violation; or
        • (ii) $3,000; or
      • obtain, for each violation, any other restitution, penalties, and other legal or equitable relief as the court may deem just and proper.
  • (2) Willful violations
    • If the court finds that the defendant acted willfully in committing a violation described in paragraph (1), the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under paragraph (1)(B).
  • (3) Costs and attorney’s fees
    • The court shall award to a prevailing plaintiff in an action under this subsection the costs of such action and reasonable attorney’s fees, as determined by the court.
  • (4) Limitation
    • An action may be commenced under this subsection not later than 5 years after the date on which the person first discovered or had a reasonable opportunity to discover the violation.
  • (5) Nonexclusive remedy
    • The remedy provided by this subsection shall be in addition to any other remedies available to the person.
  • (6) Invalidity of pre-dispute arbitration and joint action waivers
    • Notwithstanding of title 9, United States Code (commonly known as the ), or any other provision of law, a pre-dispute arbitration agreement or pre-dispute joint action waiver between a person engaged in commerce and a consumer is not valid or enforceable for purposes of this section. Federal Arbitration Act chapter 1
• (e) Definitions
  • In this section:
    • The term — automated decision system
    • The term Commission means the Federal Trade Commission.
    • The term — genetic information
    • The term personal information means any quality, feature, attribute, or trait of an individual, including any immutable characteristic (such as race and eye color), mutable characteristic (such as address, weight, citizenship, family, or parenthood status), and any other information that could reasonably be linked, directly or indirectly, with a particular person or household.
    • The term pre-dispute arbitration agreement means any agreement to arbitrate a dispute that has not arisen at the time of making the agreement.
    • The term pre-dispute joint action waiver means an agreement, including as part of a pre-dispute arbitration agreement, that would prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a dispute that has not arisen at the time of making the agreement.
    • The term price means the amount charged or offered to a consumer in relation to a transaction, including any related cost and fee and any other material term of the transaction that has direct bearing on the amount paid by the consumer or the value of the good or service offered or provided to the consumer.
    • The term surveillance-based price setting means using an automated decision system to offer or inform a customized price for a good or service for a specific person or consumer, or group of people or consumers, based, in whole or in part, on surveillance data.
    • The term — surveillance data

SEC. 3. Prohibition on surveillance-based wage setting

• (a) General prohibition
  • A person may not engage in surveillance-based wage setting. It shall not be considered surveillance-based wage setting so long as the person can demonstrate that the automated decision system uses only data regarding the city or State where the individual worker works and the cost of living in that city or State.
• (b) Requirement To publish procedures
  • Not later than 180 days prior to the date in which a person engaged in commerce intends to use an automated decision system to inform the wages of an individual performing services for such person, that person shall make publicly available, in a conspicuous and accessible format, reasonable procedures that include the following:
    • A process for ensuring the accuracy of all data considered by the automated decision system.
    • A process to disclose to all individuals performing services for such person which data is considered and how the automated decisions system considers the data when setting wages.
    • A procedure for individuals performing services for such person to correct or challenge the accuracy of any data considered by the automated decision system.
• (c) Enforcement by Equal Employment Opportunity Commission
  • In any case in which the Equal Opportunity Commission has a reason to believe that a violation of subsection (a) or a violation of a regulation promulgated under such subsection has adversely affected any individual or group of individuals, the Equal Employment Opportunity Commission may bring a civil action on behalf of that individual or group in an appropriate district court of the United States to—
    • enjoin such act or practice;
    • enforce compliance with such subsection or such regulation; and
    • obtain damages, restitution, penalties, or other compensation on behalf of individuals or groups or such other legal and equitable relief as the court may consider appropriate.
• (d) Enforcement by Federal Trade Commission
  • (1) Unfair or deceptive acts or practices; Unfair methods of competition
    • A violation of subsection (a) or a regulation promulgated under such subsection shall be treated as a violation of a regulation under section 18(a)(1)(B) of the () regarding unfair or deceptive acts or practices and as a violation of the Federal Trade Commission Act () regarding unfair methods of competition. 15 U.S.C. 57a(a)(1)(B); 15 U.S.C. 45(a)
  • (2) Powers of Commission
    • The Federal Trade Commission shall enforce subsection (a) and any regulation promulgated under such subsection in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the () were incorporated into and made a part of this Act. Any person who violates such subsection or a regulation promulgated under such subsection shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act. 15 U.S.C. 41 et seq.
  • (3) Common carriers and nonprofit organizations
    • Notwithstanding section 4, 5(a)(2), or 6 of the Federal Trade Commission Act (; 45(a)(2); 46) or any jurisdictional limitation of the Federal Trade Commission, the Federal Trade Commission shall also enforce subsection (a) or a regulation promulgated under subsection (a), in the same manner provided in paragraphs (1) and (2), with respect to— 15 U.S.C. 44
      • common carriers subject to the Communications Act of 1934 () and all Acts amendatory thereof and supplementary thereto; and 47 U.S.C. 151 et seq.
      • organizations not organized to carry on business for their own profit or that of their members.
  • (4) Authority preserved
    • Nothing in this Act may be construed to limit the authority of the Commission under any other provision of law.
• (e) Actions by States
  • In any case in which the attorney general of a State, or an official or agency of a State, has reason to believe that an interest of the residents of such State has been or is threatened or adversely affected by an act or practice in violation of subsection (a) or a regulation promulgated under such subsection, the State may bring a civil action on behalf of the residents of the State in an appropriate State court or district court of the United States of appropriate jurisdiction to—
    • enjoin such act or practice;
    • enforce compliance with such subsection or such regulation;
    • obtain, per violation, the greater of—
      • the actual monetary damages incurred from the violation; or
      • $3,000; or
    • obtain any restitution, penalties, and any other legal or equitable relief on behalf of residents as the court may deem just and proper.
• (f) Private right of action
  • (1) In general
    • A person injured by an act or practice in violation of subsection (a), or a regulation promulgated under such subsection, may bring in an appropriate State court or a district court of the United States of appropriate jurisdiction an action to—
      • enjoin the violation;
      • obtain, for each violation, the greater of—
        • (i) the actual monetary damages incurred from the violation; or
        • (ii) $3,000; or
      • obtain, for each violation, any other restitution, penalties, and other legal or equitable relief as the court may deem just and proper.
  • (2) Willful violations
    • If the court finds that the defendant acted willfully in committing a violation described in paragraph (1), the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (A)(ii).
  • (3) Costs and attorney’s fees
    • The court shall award to a prevailing plaintiff in an action under this subsection the costs of such action and reasonable attorney’s fees, as determined by the court.
  • (4) Limitation
    • An action may be commenced under this subsection not later than 5 years after the date on which the person first discovered or had a reasonable opportunity to discover the violation.
  • (5) Nonexclusive remedy
    • The remedy provided by this subsection shall be in addition to any other remedies available to the person.
  • (6) Invalidity of pre-dispute arbitration and joint action waivers
    • Notwithstanding of title 9, United States Code (commonly known as the ), or any other provision of law, a pre-dispute arbitration agreement or pre-dispute joint action waiver between a person engaged in commerce and an individual whose wages are set in violation of this section shall not be valid or enforceable for the purposes of this section. Federal Arbitration Act chapter 1
• (g) Definition
  • In this section:
    • The term — automated decision system
    • The terms and have the meanings given the terms in section 3 of the Fair Labor Standards Act of 1938 (). commerce,person 29 U.S.C. 203
    • The term personal information means any quality, feature, attribute, or trait of an individual, including any immutable characteristic (such as race and eye color), mutable characteristic (such as address, weight, citizenship, family, or parenthood status), and any other information that could reasonably be linked, directly or indirectly, with a particular person or household.
    • The term pre-dispute arbitration agreement means any agreement to arbitrate a dispute that has not yet arisen at the time of the making of the agreement.
    • The term pre-dispute joint action waiver means an agreement, including as part of a pre-dispute arbitration agreement, that would prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a dispute that has not yet arisen at the time of the making of the agreement.
    • The term surveillance-based wage setting means using an automated decision system that considers personal information or surveillance data to set or inform the compensation of an individual performing services for a person.
    • The term — surveillance data
    • The term wage means the material terms offered to a worker in exchange for labor, including the amount paid for such labor, whether in the form of an hourly rate, piece rate, salary, bonus, commission and incentives, scheduling, task assignment, or other similar material terms that have a direct impact on the earnings of the worker.

SEC. 4. Preemption of directly conflicting State laws

• (a) In general
  • Nothing in this Act may be construed to preempt, displace, or supplant any State law, except to the extent that a provision of State law conflicts with a provision of this Act.
• (b) Greater protection under State law
  • For the purposes of this Act, a provision of State law does not conflict with a provision of this Act if such State law provides additional protections with respect to individuals protected under this Act with respect to surveillance-based wage setting or the collection of surveillance data.

SEC. 5. Preservation of collective bargaining rights

• (a) Rule of construction
  • Nothing in this Act shall be construed to preempt, diminish, or interfere with the right of employees to collectively bargain over terms and conditions of employment, including protections against surveillance-based wage discrimination.
• (b) Minimum standard
  • The provisions of this Act shall be considered a minimum standard and may not be construed to limit the authority of labor organizations and employers to negotiate and agree to stronger or additional protections through collective bargaining agreements.
• (c) Existing agreements
  • In the case that a collective bargaining agreement is in place, employers shall provide advance notice and a reasonable opportunity for bargaining over any intended use of automated decision systems to set or influence employee compensation.
• (d) Stronger protections
  • Any rights or protections negotiated through a collective bargaining agreement that exceed the requirements of this Act shall be fully enforceable and shall not be considered waived or precluded by compliance with this Act.