algorithms
Definition
An algorithm is a set of step-by-step instructions that a computer follows to make decisions or complete tasks automatically. In legal and business contexts, algorithms often come up when discussing how software makes decisions that affect people, like approving loans, setting prices, or ranking search results.
Example
If your e-commerce platform automatically adjusts product prices based on competitor data and demand, that pricing tool is running on an algorithm.
Watch Out
Regulators are increasingly scrutinizing algorithms that make decisions affecting customers, so if your business uses automated decision-making tools, you may have legal obligations to explain how those decisions are made.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.