Prohibits the use of algorithmically set prices; requires the disclosure of automated pricing systems; creates a private cause of action for violations of such prohibition.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9349
SPONSOR: Torres TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting the
use of algorithmically set prices and requires the disclosure of auto-
mated pricing systems
PURPOSE OR GENERAL IDEA OF BILL:
To protect consumers from discriminatory and opaque pricing practices
driven by algorithms that use personal data. The bill prohibits "person-
alized algorithmic pricing," restricts the use of personal data for
"surveillance pricing," requires clear disclosure when automated pricing
systems are used, and establishes robust enforcement mechanisms, includ-
ing a private right of action.
SUMMARY OF PROVISIONS:
Section 1 amends Section 349-a of the General Business Law by establish-
ing definitions for key terms such as algorithm, consumer, personal
data, dynamic pricing, personalized algorithmic pricing, and automated
pricing systems; prohibiting entities from using • personalized algo-
rithmic pricing based on consumers' personal data; restricting the
collection, use, retention, or disclosure of personal data for surveil-
lance-based pricing; and requiring entities that use automated pricing
systems to clearly and conspicuously disclose the system's use along
with the categories of non-personal inputs that influence pricing.
This section also outlines specific exceptions, including those for
regulated industries, subscription-based discounts, uniform promotions,
non-personal dynamic pricing, compliant loyalty programs, prices author-
ized by law, and bona fide group-based discounts. Additionally, Section
1 provides enforcement mechanisms through the Attorney General, author-
izes civil penalties, restitution, and injunctive relief, and estab-
lishes a private right of action for harmed consumers, including statu-
tory damages, actual damages, and attorneys' fees, while clarifying that
the section does not limit other liabilities under, law.
Section 2 provides that the act shall take effect 180 days after becom-
ing law and authorizes the adoption of any necessary rules or regu-
lations before the effective date.
JUSTIFICATION:
As pricing algorithms become increasingly sophisticated, many companies
now use personal data, including browsing history, geolocation, purchase
behavior, and online activity, to set individualized prices. This prac-
tice, known as personalized algorithmic pricing or surveillance pricing,
allows entities to charge different consumers different prices for the
same good or service based on personal characteristics.
These pricing methods occur without meaningful consumer awareness or
consent, resulting in hidden discrimination, economic harms, erosion of
trust and invasive data practices.
A recent study by
CONSUMER REPORTS released this week confirms that
Instacart's AI-enabled pricing schemes are inflating grocery bills by
upwards of 23 percent. In early 2025, the Federal Trade Commission (FTC)
released a
REPORT detailing how companies use personal data such as
location or browser history to set individualized prices. The report
confirmed that consumers can be charged different prices for the same
product or service based on this data. Over the past decade, companies
like Staples and Princeton Review were found to vary prices by zip code,
with patterns suggesting racial and ethnic discrimination.
New York consumers deserve transparent and fair pricing. By prohibiting
the use of personal data for individualized pricing and requiring
disclosure of non-personal automated pricing systems, this bill restores
consumer autonomy and prevents exploitative data-driven pricing models.
PRIOR LEGISLATIVE HISTORY:
New section 349-a was originally enacted in Part X of Chapter 58. This
bill strengthens and clarifies the statutory framework by closing loop-
holes, expanding consumer protections, and enhancing enforcement tools.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Minimal. Enforcement costs may be offset by civil penalties, which the
bill directs toward consumer protection and data privacy enforcement.
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after 24 it
shall have become a law.
