Prohibits the use of electronic shelving labels, digital shelf display technology, and personalized algorithmic pricing in food retail establishments and drug retail establishments; provides injunctive relief, civil penalties, and a private right of action.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9396
SPONSOR: Solages TITLE OF BILL:
An act to amend the general business law, in relation to establishing
the protecting consumers and jobs from discriminatory pricing act
PURPOSE:
To make it unlawful for grocery stores and drug stores to engage in
personalized algorithmic pricing and surveillance pricing.
SUMMARY OF PROVISIONS:
Section 1 of the bill provides the short title: "Protecting Consumers
and Jobs from Discriminatory Pricing Act."
Section 2 of the bill sets forth its legislative findings: It is the
policy of this state to protect both consumers and workers from discri-
minatory pricing schemes, such as personalized algorithmic pricing and
surveillance pricing.
Section 3 of the bill amends the general business law to prohibit food
and drug retail establishments from engaging in personalized algorithmic
pricing or surveillance pricing. The use of electronic shelving labels
at these establishments would also be prohibited, as well as setting
prices using protected class data or data collected from minors under
17. This section is also amended to add new definitions, such as
"surveillance pricing" and "food retail establishment," and new enforce-
ment mechanisms, such as civil penalties and a private right of action.
Section 4 provides a severability clause.
Section 5 sets the effective date.
JUSTIFICATION:
Advancements in algorithms, artificial intelligence, and electronic
shelving technology have made it possible for companies to set prices
based on personal or protected data. If left unchecked, companies could
potentially use this technology to engage in discriminatory pricing and
violate consumer privacy rights. This technology also poses a threat to
numerous jobs across New York State, thus stifling economic growth and
putting the livelihoods of many citizens at risk.
Despite the dangers posed by this emerging technology, there are
currently no prohibitions in place to protect New Yorkers in a meaning-
ful way. While offering goods at different prices due to customer demand
is not new, there are subtle and important differences between price
optimization and discriminatory pricing schemes, such as personalized
algorithmic pricing and surveillance pricing, which exploit consumers'
personal and protected data to maximize profits.
This technology presents significant equity concerns and risks reinforc-
ing historic inequalities. Studies show that algorithmic pricing systems
in digitally mediated markets impose higher costs on communities of
color, low income households and underserved communities. This emerging
form of digital redlining has been shown to reproduce existing struc-
tural disparities across neighborhoods and demographic groups. Algorith-
mic and surveillance pricing risks exacerbating financial burdens for
all New Yorkers, but particularly for marginalized communities who are
already disproportionately impacted by rising costs of essential goods.
New Yorkers are already feeling squeezed by the high price of every-
thing, especially groceries and over-the-counter drugs. This state
should not stand idly by while companies develop new and innovative ways
to monetize our personal information. This bill would, thus, make it
unlawful for grocery stores and drug stores to engage in personalized
algorithmic pricing and surveillance pricing. These stores would also
be barred from using electronic shelving technology in order to ensure
compliance with these new pricing rules.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This bill shall take effect immediately.
