The original version of this story appeared in Quanta Magazine. Imagine a town with two widget merchants. Customers prefer cheaper widgets, so the merchants must compete to set the lowest price.

Companies are increasingly using pricing algorithms and other AI systems to develop and improve their ability to promptly respond to market conditions, innovate product offerings, and set prices.

California companies that use algorithms to fix the prices of their products and services could now face stiff antitrust penalties if they continue to do so. … Governor Gavin Newsom signed California ...