Patchwork surveillance pricing laws could pose a challenge for retailers

The practice of retailers changing prices based on consumer data is known by several names—surveillance pricing, dynamic pricing, personalized pricing—and is potentially on its way to being governed by a patchwork of laws.

Concerns over the practice have been brewing for several years. Lawmakers raised issues with dynamic pricing in 2024 amid the growing adoption of electronic shelf labels, and the FTC followed with a since-paused inquiry into surveillance pricing in January 2025. Last December, an investigation into Instacart’s AI pricing tool reignited interest in the topic.

Now, legislation is starting to take shape. Last month, Maryland became the first state to ban grocers and grocery delivery services from setting their prices based on consumers’ personal data. Plus, more than 70 bills targeting surveillance pricing have been introduced this year alone, according to Bloomberg Law, with proposed new legislation in New York City, New Jersey, and California that would force retailers to reevaluate or change their pricing practices.

Cost pressures have intensified scrutiny, and this new legislation “adds a little bit more teeth,” to an issue that likely isn’t going away, Kwamina Williford, partner and co-chair of the consumer protection defense and compliance team at law firm Holland & Knight, told Retail Brew. And it could pose a challenge for retail compliance as each state develops their own rules.

Dynamic environment: States are taking different approaches to surveillance pricing legislation. Maryland’s bill, effective October 1, includes several exceptions: Retailers can still offer promotional pricing and special prices for loyalty members, for example, and can even charge a specific price to a consumer who consents to the use of their data in exchange for that price.

Several other proposed bills feature various definitions and exceptions. One recently proposed New Jersey law would take aim at electronic shelf labels. New York City introduced two new bills last month that define and target surveillance pricing and dynamic pricing separately.

That comes after the state of New York last year passed a law that requires companies to disclose if they’re engaging in “personalized algorithmic pricing” without banning it outright. Since then, sites like Target’s now note, “New York state law requires businesses to display the following disclosure: This price was set by an algorithm using your personal data.”

Meanwhile, federal legislation could be brewing next. Last month, House Energy and Commerce Committee Ranking Member Frank Pallone Jr. launched an inquiry into surveillance pricing that included a letter to 25 major retailers, including Target, Walmart, Kroger, Amazon, and Aldi, asking what consumer data they collected to inform prices and how it was used. The request for information is voluntary, Williford noted, and is aimed at getting answers to speculation over pricing practices.

Surveillance state: The flurry of new legislation—some blocking surveillance pricing, others requiring disclosure of it—could create a patchwork of laws that vary from state to state, which could “make compliance extremely complex,” Williford said.

And a path forward for nationwide legislation isn’t clear cut. Pallone’s inquiry could indicate a push for nationwide legislation on the issue, but passing federal laws regarding consumer privacy has been historically difficult, Williford and Beth Shirley, an AI, cybersecurity, and data privacy attorney at firm Burr & Forman, both noted, so the future of federal surveillance pricing legislation is questionable.

In the case of multi-state retailers operating in states with surveillance pricing laws, Shirley advised abiding by the “highest standard” across retail locations, as state-by-state compliance could become “unwieldy” and create a risk for errors. Williford noted now is a “good time to do an internal assessment regarding how you’re collecting information,” including evaluating the level of consent consumers have given retailers to use certain data in the way they’re using it.

This is true even for retailers operating in states without surveillance pricing legislation, Williford noted, as consumers, too, are driving concerns, as is the case in the April class action lawsuit against JetBlue. Being “forthright” with any inbound consumer concerns is crucial, she said.

“The scrutiny is not going to go away regarding price transparency,” Williford said.