States are weighing in on whether grocery stores, hotel chains, and retailers should be using personal consumer information such as “browsing history” and “location data” to decide what price you see, when someone else might see something different. Pioneering this inquiry is California, approaching this individualized pricing as a potential privacy problem. At the end of last month, California Attorney General Rob Bonta announced an “investigative sweep” into businesses’ use of personal data to set individualized prices, warning that “surveillance pricing” may violate the California Consumer Privacy Act (CCPA). The inquiry is aimed at companies in the retail, grocery, and hotel sectors, focusing on how they use data like “shopping and internet browsing history, location, demographics, and other data” to price goods and services.
Attorney General Bonta is also asking about the surrounding governance: what businesses disclose, what “pricing experiments” they run, and how they ensure compliance with “algorithmic pricing, competition, and civil rights laws.” The core consumer-facing concern is “whether businesses are charging people different prices for the same good or service.”
Not everyone agrees that states should police this through disclosure requirements. The National Retail Federation sued New York Attorney General Letitia James over the state’s algorithmic pricing disclosure law, arguing it violates the First Amendment. The trade group’s concern is that even when consumers “know” pricing is personalized through loyalty programs, companies may still be compelled to display a disclosure that personal data was used to set the price “based on an algorithm.” California may see similar complaints and arguments.
States seem to be moving from theory to enforcement and mandates. Companies will need to respond by reassessing loyalty programs, discount targeting, and other data-driven pricing strategies for regulatory risk.