New Jersey Advances Toward Banning Surveillance Pricing

New Jersey is progressing in efforts to stop surveillance pricing as state lawmakers passed a bill limiting how retailers use shoppers’ personal data to set individualized pricing. The Fair Price Protection Act, passed on Tuesday, seeks to prevent retailers and third-party grocery delivery platforms from using data gathered through electronic means to charge varying prices for the same grocery and food products. The bill awaits the signature of Democratic Governor Mikie Sherrill.

Why It Matters

The use of artificial intelligence and consumer information to personalize prices is sparking debate. As retailers access more data on shopping habits and behaviors, critics argue that surveillance pricing is predatory. This practice allows companies to use personal data to assign different prices to the same items. Opponents of limiting this practice argue that it may make it difficult for retailers to provide personalized discounts via loyalty programs.

Details of the New Jersey Bill

The New Jersey Senate passed the Fair Price Protection Act with a 22-14 vote, following a 51-20-1 Assembly approval. If enacted, the bill would ban retailers from setting prices based on consumers’ personal data, including information acquired from electronic surveillance, biometric monitoring, genetic data, and protected class information. Should the governor sign the bill into law, New Jersey shoppers would no longer face different prices for the same grocery items based on personal data.

Lawmakers’ Views on Surveillance Pricing

State Senator Joe Lagana, a Democratic co-sponsor of the bill, labeled surveillance pricing as “a modern form of consumer fraud” in a press release. He stated that it covertly alters prices based on shoppers’ private online habits. “As families grapple with increasing costs of essentials, the Fair Price Protection Act seeks to end these deceptive tactics and promote fair treatment of consumers,” he remarked.

New Jersey Republicans, however, expressed concerns about the bill’s effects, saying it might lead to unintended outcomes like the removal of loyalty programs due to new restrictions on utilizing consumer data for discounts. They stated, “Prepare to say goodbye to your ShopRite PricePlus card.” State Democrats clarified that the bill would not deter retailers from offering promotional discounts to broadly categorized groups, such as teachers, veterans, and seniors, or via loyalty schemes.

The legislation also imposes a one-year halt on introducing new electronic shelf labels while the state examines whether this technology could assist in surveillance pricing. Retailers already using such labels may continue during this period.

Other States and Surveillance Pricing

Maryland and Connecticut have enacted laws restricting surveillance pricing, and similar legislation in New York awaits the governor’s approval. Across the United States, more than 50 bills have appeared in 26 states targeting this practice, as noted by Money.com.

Next Steps

The Fair Price Protection Act reaches the governor for potential signing into law. If approved, the legislation is scheduled to go into effect one year post-enactment.