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The new law is scheduled to take effect next year Grocery stores bars in New Jersey from setting prices based on the personal data of any particular shopper.
the Fair Price Protection Act He seeks to break the law Monitor pricing It discriminates against individual customers by using personal information such as purchase history or online activity.
“New Jersey families are already feeling the pressure of rising costs,” New Jersey Governor Mickey Sherrill said in a statement. “The last thing they need is for companies to secretly use their personal data to charge them more than anyone else for the exact same product.”
Penalties for retailers can include fines of up to $10,000 for a first violation, $20,000 for subsequent violations and the possibility of cease and desist orders and the assessment of punitive damages.
The law also includes a provision that pauses new electronic shelf labels for a year while the state studies its impact on monitoring pricing.
two other states, Maryland and Connecticutrecently enacted laws aimed at protecting consumer privacy, especially when it comes to grocery prices. Other states, including New York and California, are considering similar new laws. last year, New York State sets the rules Require companies to disclose to customers when they set prices based on algorithms.
What constitutes monitoring pricing
Some state laws have focused on algorithmic pricing, which can include companies using artificial intelligence to coordinate price setting, which is the subject of… Lawsuit in California over gas prices. This is closer to what people know Surprise pricingA company like Uber may raise prices when roads are crowded and demand for its services is high.
However, surveillance pricing typically means that the retailer has personal information from its customers, for example through a loyalty or discount shopping programme, which it uses to set different prices for different shoppers.
According to the Electronic Privacy Information Center, personal data and market data are used by retailers to determine the highest price a customer is willing to pay, resulting in higher prices.
“This undermines consumers’ expectations of fairness and could amount to a violation of the state’s consumer protection law.” Epic said On its website. “Price differentials may also be discriminatory based on protected characteristics, such as race and gender.”
The Federal Trade Commission has investigated these types of practices. In a Report on monitoring prices Last year, the FTC found that companies may be co-opting customers who have access to discounts in order to incentivize infrequent buyers to make purchases.
Separately, Consumer Reports found An AI pricing experiment could result in grocery bills running hundreds or thousands of dollars higher for customers who use services like Instacart.
In a statement Regarding the New Jersey law, EPIC applauded the measure however He pointed out more This must be done, including “expanding the scope of the law beyond the context of grocery stores, narrowing the scope of the legal exemption for loyalty programs, and clarifying some basic definitions.”
