Source: A&O Shearman

The U.S. Department of Justice Antitrust Division signalled that companies using shared AI-powered pricing algorithms may face criminal prosecution when certain factors are present. In a May 14, 2026 speech by Daniel Glad, the Division indicated that defendants could face prison terms for individual executives and substantial corporate fines if prosecutors prove beyond a reasonable doubt that participants entered into a horizontal agreement via a shared algorithm. The Division’s criminal theory relies on a hub-and-spoke conspiracy model where competitors (spokes) feed competitively sensitive data into a common pricing algorithm (hub), and that data-driven coordination forms the “rim” of a horizontal conspiracy.

Glad clarified that algorithmic pricing is not per se illegal, but criminal scrutiny is likely when competitors share proprietary pricing, cost, or supply data; know or are willfully blind that the data will inform competitors’ pricing; the information exchanged would be unlawful if shared directly; or compliance measures are perfunctory. The piece notes significant legal uncertainty about whether courts will treat such arrangements per se illegal or under the rule of reason, highlights difficulties in proving the requisite knowledge element—especially where third-party vendors are involved—and references prior enforcement patterns (including no-poach guidance and a 2015 algorithm-related plea). The article states A&O Shearman is advising clients on structuring algorithmic tools and compliance programs to minimize enforcement risk.