This Service Could Become Cheaper With Surveillance Pricing Ban

NEW YORK, NY — New York lawmakers approved legislation that would ban companies from using consumers’ personal data to determine prices, advancing one of the nation’s most expansive efforts to curb a practice known as surveillance pricing.

The measure, known as the One Fair Price Act, passed both chambers of the Legislature and now awaits action from Gov. Kathy Hochul.

If signed, the bill would prohibit businesses from collecting, using, retaining or sharing personal data to set individualized prices for goods.

The legislation targets a growing practice in which companies use information such as browsing history, shopping habits, location data and other consumer behavior to estimate how much a person is willing to pay and adjust prices accordingly.

New York’s bill would apply across industries and is among the strongest measures proposed nationwide, according to consumer advocates.

“We have been really digging into the ways in which companies are using new technologies in their pricing by and large to charge Americans more,” Lindsay Owens, executive director of the advocacy group Groundwork Collaborative, said.

Owens said companies increasingly collect information about what consumers buy, what they search for online, what products they consider purchasing and demographic data that can be used to tailor prices.

“The concern is that some companies have started putting all of that data to work for their pricing strategies,” Owens said. “The result is that they can charge you the absolute maximum you're willing to pay.”

Groundwork Collaborative recently released polling showing broad support for restrictions on the practice.

A survey conducted with Data for Progress found nearly 80 percent of likely New York voters oppose companies using personal data to determine prices, while 77 percent support banning surveillance pricing outright.

State Attorney General Letitia James, who backed the proposal, called its passage a major step toward consumer protections.

“This is a big victory in our fight to ban surveillance pricing and help make life more affordable in New York,” James wrote on social media after lawmakers approved the bill.

The legislation arrives as states across the country grapple with the rise of algorithmic pricing.

Maryland became the first state to enact a surveillance-pricing ban earlier this year, though the law applies only to grocery stores. Connecticut recently approved restrictions as part of a broader consumer privacy measure, while lawmakers in several other states are considering similar proposals.

The Business Council of New York State argued the legislation could affect targeted discounts and promotional offers commonly used by retailers.

“It’s important for the public to understand that these discounts are not disappearing because businesses chose to end them, but because the Legislature is banning them,” the group said in a statement.

The debate has intensified nationally as lawmakers weigh how to regulate algorithmic pricing.

In Colorado, Gov. Jared Polis recently vetoed legislation that would have banned surveillance pricing and wage-setting practices, saying the measure was too broad and could restrict beneficial uses of technology.

In New York, supporters say the state has an opportunity to establish a new standard for consumer protections before personalized pricing becomes more widespread.

“We’re seeing examples pop up practically every week at this point,” Owens said. “Before the horse is totally out of the barn, and this becomes a practice that is ubiquitous in the American economy, it would be great to really lay it to rest.”

What The Ban Could Affect

Grocery Delivery Apps

• Services such as Instacart could face new restrictions on using shopping history, browsing behavior or other personal data in pricing decisions.
• Consumer advocates have pointed to pricing experiments and personalized offers as examples of practices the bill seeks to address.

Ride-Hailing Services

• Companies such as Uber and Lyft already use dynamic pricing, commonly known as surge pricing.
• The legislation targets individualized pricing based on personal data, not traditional surge pricing driven by supply and demand.

Online Retailers

• E-commerce companies could be barred from using browsing history, purchase history, location data or other personal information to offer different prices to different customers for the same product.

Airlines And Travel Booking Sites

• Consumer advocates have raised concerns about airline tickets and travel reservations changing based on a user's online activity, device information or search behavior.
• Airlines and booking platforms would be prohibited from using personal data to set individualized prices if the bill becomes law.

Ticket Sales Platforms

• Ticket marketplaces such as StubHub could face limits on using consumer data to determine what individual customers see or pay for event tickets.

Pharmacies And Grocery Stores

• A separate proposal in Albany would prohibit electronic shelf labels and surveillance pricing in food and drug stores, though that measure has not yet cleared the Legislature.

What Would Still Be Allowed?

• Loyalty and rewards programs.
• Senior, student and military discounts.
• Coupons available to the general public.
• Standard sales and markdowns.
• Dynamic pricing based on market conditions rather than personal consumer data.