New York state legislation targets individualized pricing
New York Introduces Transparency Rules for Algorithmic Pricing
The most recent state budget in New York has introduced new rules requiring companies to disclose when they use personal information to determine individual pricing for customers—for instance, charging higher prices to those with a record of frequent spending.
Under these regulations, businesses that implement personalized pricing must inform consumers with a statement such as, “This price was set by an algorithm using your personal data,” as reported by The New York Times.
There is still uncertainty about how common this pricing strategy is among online sellers. According to a spokesperson from Uber, the company has begun displaying this notice to customers in New York. However, they criticized the legislation as “poorly drafted and ambiguous,” and emphasized that Uber’s dynamic pricing is based solely on location and demand, not on personal data.
Although the National Retail Federation attempted to block the law through legal action, a federal judge has permitted its implementation.
Lina Khan, who previously chaired the Federal Trade Commission and now serves as co-chair for Zohran Mamdani’s mayoral transition team, described the law to the NYT as an “absolutely vital” resource for government oversight. She also noted that much more needs to be done to effectively regulate personalized pricing practices.
