(The Center Square) – New York Gov. Kathy Hochul is being urged by a coalition of consumer advocates to approve a state ban on surveillance pricing by retailers and beef up the proposed regulations with new safeguards.
The One Fair Price Package, which is awaiting action by the Democratic governor, would ban big-box stores, retailers and grocery stores from using shoppers’ personal data to charge different customers different prices, a controversial practice known as surveillance pricing.
“At a time when New Yorkers are struggling with rising costs, this legislation represents a meaningful step towards affordability,” they wrote.
The groups, which include the Center for Democracy and Technology and the Electronic Privacy Information Center, recommended that Hochul use the amendment process to “strengthen” the bill by including additional safeguards for consumers. Those include closing “loopholes” in current laws that allow companies to use “location data” from a user’s smartphone to set prices based on their geographic location and to limit consumers’ purchase data.
They pointed out that surveillance pricing is “incredibly unpopular” with consumers, citing recent polling which found that 76% of consumers say it is unfair for companies to use customers’ personal information to charge different prices for the same products.
“Policymakers on both sides of the aisle have identified this issue as one that requires immediate action, and several other states have enacted legislation to ban surveillance pricing,” they wrote.
But Hochul is also being pressured by a trade group that includes Apple, Amazon and other big-tech companies to reject or amend the legislation to reduce the impact on consumers. The Chamber of Progress has urged her to veto the bill, saying that “businesses should not use personal data to charge an individual shopper more” but that Democratic proposal “reaches well beyond that.”
“Its prohibition turns on whether a price was personalized at all, not on whether it went up or down,” the group said in a recent statement. “The bill treats a discount and a surcharge as the same offense, stopping companies not only from using a shopper’s data to charge them more but from using it to charge them less.”
The effort to ban the practice is backed by New York Attorney General Letitia James, a Democrat who has pushed for approval of new restrictions on algorithmic pricing as part of her consumer protection agenda. The legislation would authorize the AG’s office to pursue civil cases for penalties and restitution against companies or retailers that use surveillance pricing.
The Democratic-led New York City Council is considering a package of bills that would ban surveillance pricing and restrict grocery stores from raising an item’s price more than once in a 24-hour period.
But the chamber said the legislation would eliminate loyalty deals, digital coupons, and personalized savings “that families count on to manage rising costs, all while making New York the test case for an experiment that is both untested and unpopular.”
“New York should not be the first state to rush this regime into law,” the chamber said. “Many states have weighed data-driven pricing legislation this year, and the few that have enacted anything have done so narrowly, with care to protect everyday savings.”
