How California's new pricing-algorithm law changes rent-setting
A new antitrust law limits how landlords use pricing software, but a bill written specifically for rental algorithms has stalled, and cities have their own rules.
California landlords who use software to help set rents got a new set of statewide rules this year, but not from the bill most often described as an algorithmic rent-pricing ban. On Jan. 1, 2026, Assembly Bill 325 took effect, amending the state's main antitrust law, the Cartwright Act, to restrict how any business, including landlords, can use pricing software that draws on competitors' data. A separate bill written specifically for rental pricing algorithms, SB 52, has not become law.
The result is a layered and still-unsettled set of rules. State antitrust law now reaches pricing algorithms broadly. Several California cities have narrower, more specific bans on rent-setting software. And federal and state antitrust enforcers are already forcing changes on RealPage, the rental pricing software company at the center of the fight, through separate lawsuits and settlements that are shaping practice ahead of any court ruling on the new state law.
What AB 325 actually prohibits
AB 325, written by Assemblymember Cecilia Aguiar-Curry, was signed by Gov. Gavin Newsom on Oct. 6, 2025, and took effect Jan. 1, 2026. It amends the Cartwright Act to cover what the statute calls a "common pricing algorithm": any software or other methodology used by two or more businesses that draws on competitor data to recommend, align, stabilize or otherwise influence a price or contract term.
Two things become unlawful under the new provisions. First, using or distributing such an algorithm as part of an agreement or conspiracy to restrain trade. Second, using or distributing the algorithm to coerce another business into adopting its recommended price or terms, a separate violation that does not require proving a broader conspiracy. The statute's definition of "person" excludes end consumers, so the law targets businesses on the selling side of a transaction, including landlords and property managers.
What pricing software landlords can still use
The law does not ban pricing software outright. Legal analyses of the bill, including from law firms Pillsbury and Cleary Gottlieb, describe proprietary systems built on a single company's own data, with no competitor inputs, as remaining lawful. The trigger for liability is a tool used by multiple businesses that pulls in competitor data to shape prices.
A floor analysis of the bill for lawmakers described AB 325 as "structured to avoid interfering with ordinary or beneficial uses of pricing software," targeting only situations where separate firms use shared algorithms; businesses that develop or use their own proprietary pricing tools "remain unaffected," the analysis said.
Penalties got steeper, and lawsuits got easier to file
Cartwright Act violations have long allowed private plaintiffs to recover triple their actual damages plus attorneys' fees and injunctive relief. AB 325 did not change that remedy, but a companion measure, SB 763, signed two days later on Oct. 8, 2025, and taking effect alongside it on Jan. 1, 2026, raised the penalties tied to any Cartwright Act violation. Maximum criminal fines for a corporate violation rose from $1 million to $6 million; for an individual, from $250,000 to $1 million, on top of up to three years in prison. SB 763 also created a new civil penalty of up to $1 million per violation in cases brought by the attorney general or a district attorney.
AB 325 separately lowered the pleading standard for Cartwright Act conspiracy claims. Plaintiffs no longer need to allege facts that exclude the possibility of independent, non-coordinated pricing decisions to survive a motion to dismiss; they need only allege facts that make a conspiracy plausible. Law firms tracking the change say that makes it easier for renters, tenants or competitors to get a pricing-algorithm case past the earliest stage of litigation.
The RealPage lawsuits already reshaping the software
The legislation followed years of federal and state litigation against RealPage, a company whose revenue-management software recommends rents to landlords using pooled, nonpublic data on competitors' pricing and occupancy. The Department of Justice and eight states sued RealPage in August 2024, alleging the software let competing landlords coordinate pricing in violation of the Sherman Act. The DOJ filed a proposed settlement on Nov. 25, 2025, that bars RealPage from using nonpublic, competitively sensitive data in real time when generating price recommendations, requires that any such data used to train its models be at least 12 months old, and largely bars price and narrowly localized data from training even when older. The settlement also requires RealPage to change features like "Auto Accept," which must let a user manually set the range of automatic price changes rather than defaulting to one, and "Governor," which must treat price increases and decreases symmetrically. The DOJ settlement does not resolve the states' separate claims.
California Attorney General Rob Bonta is pursuing his own case against RealPage and several large property managers, including Camden, Pinnacle and Willow Bridge, with a complaint filed in January 2025. Two defendants have settled separately from the DOJ case: Greystar, the largest landlord in the United States, agreed to pay $7 million on Nov. 18, 2025, and LivCor agreed to pay $7 million on a settlement covering roughly 57 California properties announced June 18, 2026. Both must stop using revenue-management software built on competitors' nonpublic pricing data and cooperate with the state's ongoing case against RealPage and the remaining defendants; Greystar's settlement also bars it from attending RealPage-hosted meetings of competing landlords.
“No statewide law specifically defines or bans a 'rental pricing algorithm' by that name.”
Local ordinances go further than the state law
Before AB 325 existed, several California cities passed their own, narrower bans specifically targeting rent-setting algorithms. San Francisco's Board of Supervisors approved the first such ordinance on Sept. 3, 2024. It bans the sale or use of algorithmic devices to set rents or occupancy levels for residential units in the city and carries civil penalties of up to $1,000 per violation, plus damages, restitution and attorneys' fees.
Berkeley followed in March 2025, San Diego in April 2025 and Santa Monica in July 2025, with a similar ordinance proposed in San Jose in June 2025. These local laws are more targeted than AB 325: they focus specifically on rental pricing devices rather than pricing algorithms across the economy, and several impose flat per-violation penalties rather than relying on antitrust conspiracy theories.
The rent-specific bill that hasn't passed
SB 52, authored by state Sen. Pérez, would go further than AB 325 for housing specifically. As written, it would bar selling or licensing a rental pricing algorithm to two or more landlords with the intent that it be used to set rents in the same market, and would bar landlords from setting rents based on an algorithm's recommendation if they know it draws on nonpublic competitor data shared with other landlords in that market. Proposed penalties run up to $1,000 per violation, with enforcement by the attorney general, city attorneys and county counsel, plus a private right of action and recoverable attorneys' fees.
The bill has not been signed into law. Its most recent amendment was in the Assembly on July 17, 2025, and it remains a two-year bill that can still be taken up in the 2026 legislative session, but for now, no statewide law specifically defines or bans a "rental pricing algorithm" by that name. Landlords and renters are instead left with AB 325's broader antitrust framework, the local ordinances in specific cities, and the outcomes of the RealPage litigation.
