Stop AI Price Gouging and Wage Fixing Act of 2025
- Bill Number
- H.R. 4640
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Commerce
- Status
- Introduced
- Latest Action
- 2025-07-23: Referred to the Committee on Energy and Commerce, and in addition to the Committees on the Judiciary, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-05-20T08:08:17Z
AI-Generated Summary
Purpose of the Legislation
The "Stop AI Price Gouging and Wage Fixing Act of 2025" (H.R. 4640) aims to prevent unfair practices by prohibiting the use of automated decision systems—such as artificial intelligence (AI) or machine learning tools—that rely on surveillance data to set personalized prices for goods and services or individualized wages for workers. It seeks to protect consumers from discriminatory pricing and employees from biased compensation decisions based on personal monitoring or data collection.
Key Provisions
- Prohibition on Surveillance-Based Price Setting (Section 2):
- Bans businesses from using automated systems to create customized prices for specific individuals or groups based on "surveillance data," defined as information gathered through observation, inference, or tracking of personal details (e.g., behavior, biometrics, genetic information, or traits like race or address).
- Exceptions (not considered violations if conditions are met):
- Price differences based only on reasonable delivery or service costs.
- Discounts for broad groups (e.g., teachers, veterans, students) with clear, public eligibility rules.
- Rewards from loyalty programs where consumers opt in voluntarily.
- Businesses must publish clear procedures at least 180 days in advance, including data accuracy checks, ways for consumers to correct errors, and explanations of how data influences prices.
- Enforcement:
- Federal Trade Commission (FTC) treats violations as unfair or deceptive practices under existing FTC laws, with full enforcement powers extended to nonprofits and common carriers (e.g., telecom companies).
- State attorneys general can sue on behalf of residents for injunctions (court orders to stop practices), damages (actual losses or $3,000 per violation, whichever is greater), or other relief.
- Private individuals can sue for similar remedies, with triple damages for willful violations, plus court costs and attorney fees; lawsuits must start within 5 years of discovery. Pre-dispute arbitration agreements (contracts forcing disputes into private arbitration before they arise) and class action waivers are invalid for these claims.
- Prohibition on Surveillance-Based Wage Setting (Section 3):
- Bans employers from using automated systems that consider personal or surveillance data to determine wages (including hourly rates, salaries, bonuses, or scheduling that affects pay).
- Exception: Allowed if the system uses only location-based data (city/state) and local cost-of-living information.
- Employers must publish procedures at least 180 days before implementation, covering data accuracy, disclosure of how data affects wages, and worker rights to challenge data.
- Enforcement:
- Equal Employment Opportunity Commission (EEOC) can sue for discrimination impacts, seeking injunctions, damages, or other relief.
- FTC enforcement mirrors the price section, including for nonprofits and common carriers.
- State attorneys general and private workers can pursue remedies like those in the price section (e.g., $3,000 minimum damages per violation, triple for willful acts, no arbitration enforcement).
- Definitions align with labor laws (e.g., "wage" includes all pay-related terms; "person" and "commerce" from the Fair Labor Standards Act).
- Preemption of State Laws (Section 4):
- Federal law does not override state laws unless they directly conflict; states can provide stronger protections against surveillance-based practices or data collection.
- Preservation of Collective Bargaining Rights (Section 5):
- Does not interfere with union negotiations over pay or anti-discrimination protections.
- Acts as a minimum standard; unions and employers can agree to tougher rules.
- Employers with union contracts must give advance notice and bargaining opportunities before using automated systems for wages.
- Stronger union-negotiated protections remain fully enforceable.
Significant Changes to Existing Law
- Introduces entirely new federal bans on AI-driven personalized pricing and wage setting based on surveillance, which were not previously regulated at the national level.
- Expands FTC jurisdiction to cover nonprofits and common carriers, bypassing some prior limitations.
- Creates a private right of action (allowing individuals to sue directly) with statutory minimum damages ($3,000 per violation) and invalidates certain pre-dispute arbitration clauses, overriding parts of the Federal Arbitration Act— a shift from relying solely on government enforcement.
- Builds on FTC Act and labor laws by treating violations as unfair practices but adds specific AI-focused requirements like mandatory disclosures and data correction processes.
- No broad changes to privacy or labor laws, but integrates genetic and biometric data protections into pricing/wage contexts.
Potential Impacts
- On Citizens and Workers: Consumers may face more uniform pricing, reducing hidden discrimination based on personal data; workers could see fairer, less biased wage decisions, potentially narrowing pay gaps tied to surveillance (e.g., tracking online behavior or location).
- On Businesses: Companies using AI for dynamic pricing (e.g., e-commerce) or HR tools (e.g., performance algorithms) must overhaul systems, add transparency, and limit data use, increasing compliance costs but promoting ethical AI practices.
- On Government Agencies: FTC and EEOC gain broader enforcement tools and resources to investigate AI in commerce and employment; state agencies benefit from aligned federal support without preemption of local rules.
- On International Relations: No direct impacts mentioned; the bill focuses on domestic commerce and labor, though it could influence global tech standards for U.S.-based firms operating abroad.
Main Stakeholders Affected
- Consumers and Workers: Primary beneficiaries, protected from exploitative AI uses in pricing and pay.
- Businesses and Employers: Regulated entities (e.g., retailers, tech firms, gig platforms) must comply with bans and disclosures; smaller companies may face higher burdens.
- Government Agencies: FTC (leads on pricing/competition), EEOC (handles wage discrimination), and state attorneys general (local enforcement).
- Labor Unions and Advocacy Groups: Empowered through preserved bargaining rights and potential for stronger agreements.
- Tech Developers: AI providers may need to redesign tools to avoid surveillance data reliance.
Notable Legal, Constitutional, or Political Implications
- Legal: Establishes AI-specific consumer and labor safeguards, potentially setting precedents for regulating emerging technologies under antitrust and employment laws; private lawsuits could lead to more litigation, with courts interpreting "surveillance data" broadly.
- Constitutional: Aligns with due process by requiring data accuracy and challenge rights, but expanded private actions and arbitration limits might face challenges under contract rights (Fifth/Fourteenth Amendments); no apparent free speech issues, as it targets commercial practices.
- Political: Addresses growing concerns over AI ethics, privacy invasion, and economic inequality, potentially bridging partisan divides on tech regulation while sparking debates on innovation vs. protection; could influence future AI bills by emphasizing transparency and equity without overly broad bans.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (38)
Rep. Tlaib, Rashida [D-MI-12], Rep. Johnson, Henry C. "Hank" [D-GA-4], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. McGovern, James P. [D-MA-2], Rep. Simon, Lateefah [D-CA-12], Rep. Lee, Summer L. [D-PA-12], Rep. McCollum, Betty [D-MN-4], Rep. Lynch, Stephen F. [D-MA-8], Rep. Ansari, Yassamin [D-AZ-3], Rep. Garcia, Sylvia R. [D-TX-29], Rep. Ramirez, Delia C. [D-IL-3], Rep. Pocan, Mark [D-WI-2], Rep. García, Jesús G. "Chuy" [D-IL-4], Rep. Takano, Mark [D-CA-39], Rep. Huffman, Jared [D-CA-2], Rep. Deluzio, Christopher R. [D-PA-17], Rep. Tran, Derek [D-CA-45], Rep. McClain Delaney, April [D-MD-6], Rep. Chu, Judy [D-CA-28], Rep. Omar, Ilhan [D-MN-5], Rep. Carson, André [D-IN-7], Rep. Evans, Dwight [D-PA-3], Rep. Frost, Maxwell [D-FL-10], Rep. McGarvey, Morgan [D-KY-3], Rep. Balint, Becca [D-VT-At Large], Rep. DeLauro, Rosa L. [D-CT-3], Rep. Dingell, Debbie [D-MI-6], Rep. Goldman, Daniel S. [D-NY-10], Rep. Ocasio-Cortez, Alexandria [D-NY-14], Rep. Craig, Angie [D-MN-2], Rep. Foushee, Valerie P. [D-NC-4], Rep. Hoyle, Val T. [D-OR-4], Rep. Randall, Emily [D-WA-6], Rep. Pappas, Chris [D-NH-1], Rep. Green, Al [D-TX-9], Rep. Meng, Grace [D-NY-6], Rep. Wilson, Frederica S. [D-FL-24], Rep. Grijalva, Adelita S. [D-AZ-7]
Recent Actions
- 2025-07-23: Referred to the Committee on Energy and Commerce, and in addition to the Committees on the Judiciary, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-07-23: Referred to the Committee on Energy and Commerce, and in addition to the Committees on the Judiciary, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-07-23: Referred to the Committee on Energy and Commerce, and in addition to the Committees on the Judiciary, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-07-23: Introduced in House
- 2025-07-23: Introduced in House
Bill Versions
- Stop AI Price Gouging and Wage Fixing Act of 2025 — issued 2025-07-23 — PDF (21 pages)