Ten Design Guidelines To Mitigate The Risk Of AI Pricing Tool Noncompliance With The Federal Trade Commission Act, Sherman Act, And Colorado AI Act

• Published date: 12 September 2025
• Subject Matter: Antitrust/Competition Law, Technology, Antitrust, EU Competition , New Technology
• Law Firm: Duane Morris LLP
• Author: Justin Donoho

In this article, the author explains that companies increasingly face the risk of being targeted in lawsuits brought by governmental bodies and class action plaintiffs alleging unfair methods of competition in violation of the Federal Trade Commission (FTC) Act and agreements that restrain trade in violation of the federal Sherman Act. The author identifies recently emerging trends in such lawsuits, including one currently on appeal in the U.S. Court of Appeals for the Third Circuit and three pending in district courts, draws common threads, and discusses 10 guidelines that AI pricing tool designers should consider to mitigate the risk of noncompliance with the FTC Act, the Sherman Act, and Colorado AI Act.

"Express collusion violates antitrust law; tacit collusion does not. . . . [I]t is not a violation of antitrust law for a firm to raise its price, counting on its competitors to do likewise (but without any communication with them on the subject) and fearing the consequences if they do not."

'In re Text Messaging Antitrust Litig., 782 F.3d 867, 872, 876 (7th Cir. 2015) (Posner, J.) (case involving the Sherman Act)

While artificial intelligence (AI) pricing tools can improve revenues for retailers, suppliers, hotel operators, landlords, ridehailing platforms, airlines, ticket distributors, and more, designers and deployers of such tools increasingly face the risk of being targeted in lawsuits brought by governmental bodies and class action plaintiffs alleging unfair methods of competition in violation of the Federal Trade Commission (FTC) Act and agreements that restrain trade in violation of the federal Sherman Act.

This article identifies recently emerging trends in such lawsuits, including one currently on appeal in the U.S. Court of Appeals for the Third Circuit and three pending in district courts, draws common threads, and discusses nine guidelines that AI pricing tool designers should consider to mitigate the risk of noncompliance with the FTC Act and Sherman Act:

1. Stay tuned on FTC v. Amazon if considering allowing the algorithm to engage in tacit collusion;
2. Do not allow the algorithm to use shared nonpublic data to make individual price recommendations;
3. Do not allow the algorithm to publish customers' nonpublic information to other customers unless sufficiently nonsensitive aggregated, and anonymized;
4. Stay tuned on the Third Circuit if considering allowing the algorithm to train with the benefit of information provided by each customer;
5. Maintain a procompetitive message to the market versus inviting a conspiracy;
6. Design and encourage pricing decision methods alternative to accepting the algorithm's recommended prices;
7. Train the algorithm with compliant pricing data;
8. Prevent algorithmic conspiracy; and
9. Audit...