Solages Joins Rally Against Algorithmic Pricing Monday

ALBANY, NY. — Nassau County State Assemblywoman Michaelle Solages joined state colleagues Monday for a rally in support of the One Fair Price Package, a combination of two pieces of legislation that would ban algorithmic pricing at New York grocery stores and pharmacies.

Some Background On Algorithmic Pricing

Algorithmic pricing — referred to as “surveillance pricing” by its detractors, including Solages — uses customers’ personal information like location and purchasing history to set unique prices for different people. The most prominent example most readers might’ve encountered already is what ride share apps call “surge pricing,” which occurs when Uber or Lyft identify a high amount of cars being called in a small area and increase prices accordingly.

Proponents of the controversial pricing practice say it can improve efficiency, tie prices to real-time supply and allow customers to buy products when there’s a lower demand for them and save a few bucks.

To detractors of algorithmic pricing, like Solages, New York Attorney General Letitia James, Senate Deputy Majority Leader Michael Gianaris, Senator Rachel May and Assemblymember Emérita Torres, the practice allows companies to engage in predatory upcharging.

"It is appalling that companies are trying to nickel and dime New Yorkers by using their personal information to dictate how much they should pay for bare necessities like groceries and medication,” Solages said Monday. “Even worse, this kind of systematic overcharging can lead to discrimination based on a consumer's race, finances, and the neighborhood they call home. That is why I am proud to sponsor legislation in the One Fair Price Package. These bills will ensure every New Yorker pays the same price as anyone else, protecting everyday shoppers' wallets instead of corporations' bottom line."

In her comments Monday, James said the fact that a customer might be willing to pay more doesn’t mean they should have to. New York has required that businesses warn customers when they’ve used algorithmic pricing since November, per legislation.

“New Yorkers are already facing higher prices everywhere they look, and big companies do not need yet another way to hurt families’ wallets,” James said. “A new mother in urgent need of diapers should not be paying more because an algorithm has tracked her purchasing habits and recognized that she would be willing to pay a higher price, and retailers cannot erase good paying union jobs in favor of electronic shelf labels that allow prices to change.”

What This Bill Will Actually Do

Solages and James made their comments at an event in support of the One Fair Price Package, made up of two bills currently in committee in the state government.

The One Fair Price Act reads that the bill would, “amend the general business law, in relation to prohibiting the use of algorithmically set prices” and require the disclosure of automated pricing systems.

The bill says businesses that fail to comply with the ban could face a $10,000 fine for their first offense and the forfeiture of any algorithmically-obtained profits, and a $25,000 fine for repeat offenses. In the event that an individual feels harmed by algorithmic pricing, the bill reads that the affected person would be able to sue the alleged algorithmic pricer for whatever money they lost and damages amounting to between $500 and $5,000.

The bill was referred to the assembly’s consumer affairs and protection committee in January.

As for the Protecting Consumers and Jobs from Discriminatory Pricing Act, which Solages sponsors, the bill would ban the practice specifically in grocery stores and pharmacies.