Legislative Action in New Jersey
New Jersey legislators have moved a step closer to banning surveillance pricing following the passage of a new bill. The Fair Price Protection Act, passed on Tuesday, aims to restrict retailers’ use of personal data to set individualized prices. The bill awaits Democratic Governor Mikie Sherrill’s signature.
The Importance of Regulating Surveillance Pricing
As retailers access more data about consumer behavior and online activities, the use of artificial intelligence to personalize pricing has raised concerns. Critics argue that surveillance pricing is a predatory tactic that allows companies to charge varying prices for identical products based on consumer data. Meanwhile, opponents of such regulations caution that they might unintentionally hinder personalized discount offers through loyalty programs.
Provisions of the New Jersey Bill
The state Senate approved the Fair Price Protection Act with a 22-14 vote following a 51-20-1 approval in the Assembly. The bill prohibits the use of personal data, including biometric and protected class data, to determine food prices. Upon becoming law, it would prevent differential pricing for groceries based on personal data.
Partisan Reactions to the Bill
Democratic State Senator Joe Lagana, co-sponsor of the bill, described surveillance pricing as a modern form of fraud. He highlighted how the act would eliminate deceptive pricing practices, providing equal treatment to consumers without exploiting their data.
Republicans criticized the bill, warning of potential consequences like hindering loyalty programs. They argued that limitations on consumer data usage might affect discount offerings.
Despite differences, Democrats clarified that promotions aimed at broad categories like teachers or veterans remain permitted, as do specific loyalty programs.
Temporary Restrictions and Further Actions
The legislation imposes a one-year suspension on new electronic shelf labels to study their potential for supporting surveillance pricing. Current users of electronic shelf labels may continue during this period.
Surveillance Pricing Laws in Other States
Maryland and Connecticut have enacted similar restrictions. A legislative effort in New York awaits gubernatorial approval. Money.com reports over 50 bills in 26 states aimed at regulating the practice.
Next Steps for the Fair Price Protection Act
Governor Sherrill will decide on the bill’s enactment. If approved, its provisions take effect a year following its passage.
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