Industry-Wide Surveillance Pricing Ban to Advance in NY Senate

New York Democrats are moving a nation-leading surveillance pricing ban meant to discourage companies from using consumer data to personalize prices.

The ban — which bill sponsor state Sen. Rachel May said is poised to pass the state Senate next week before it heads to the state Assembly — builds on a 2025 state law that required companies to disclose the use of pricing set by an algorithm. It has found an influential backer in state Attorney General Letitia James (D) but has rattled industry groups and major corporations.

Companies including Target Corp., Marriott International Inc., and Lyft Inc. have lobbied on the measure, along with technology groups and retailer associations, according to the state ethics commission.

Opponents say the bill would cramp retailers’ ability to offer personalized discounts and potentially affect customers in loyalty rewards programs. Critics, including individual companies and associations like The Business Council of New York State, have worked to amend the language with sponsors May and Assemblymember Emerita Torres, both Democrats.

Blue states are increasingly moving to regulate “surveillance” or algorithmic pricing to protect consumers. James frequently uses her role as New York’s top law enforcement officer to link such measures to the growing dominance of Big Tech companies.

Other states have similarly announced crackdowns: Maryland Gov. Wes Moore (D) in April signed the first US bill to ban such pricing using personal data at grocery stores. And California’s Attorney General Rob Bonta (D) announced an investigation into the practice among grocers, hotels, and retailers earlier this year.

But the New York measure would apply broadly across industries, sparking alarm among lobbyists for tech groups and various industry associations.

The bill must pass both houses of the legislature and be approved by Gov. Kathy Hochul (D) before they become law. Hochul spokesperson Kristin Devoe said the governor reviews all legislation that lands on her desk.

Discounts Targeted

The measure (SB 8623) defines surveillance pricing as completely or partially set by an algorithm using “personal data” to offer different prices to different customers for the same goods or services. The language includes a carveout for “bona fide custom discounts.”

“We want to make sure transparent discounts based in transparent criteria aren’t disallowed,” May said. She acknowledged of the business industry: “We aren’t going to make them 100% happy.”

May said the ban would preserve loyalty and rewards programs but would require that members of those programs receive uniform pricing benefits and discounts, which business groups oppose.

Lyft spokesperson CJ Macklin said the company supports the intent of the measure but was concerned discounts, such as using ride history to send a lapsed rider a coupon, would be affected. The company is “engaged with the Legislature on targeted amendments to fix that distinction,” Macklin said in a statement.

Marriott International didn’t respond to requests for comment.

Business groups have also criticized the bill’s clause allowing individuals to bring private lawsuits against violators.

“Regardless of what the legislature’s intent is, companies have to go based off of what is in the black-and-white letter of the law,” said Chelsea Lemon, a lobbyist with the Business Council, which represents thousands of employers across New York.

Lemon added the group was concerned customer affordability would be harmed.

Democrats in the state Senate this week also advanced a ban on electronic price tags at grocery stores and other retailers that can automatically adjust labels. Senate Deputy Majority Leader Michael Gianaris (D) said the ban would work to “prevent data from electronic surveillance” and expressed concern that major chains could, in future, use biometric or facial recognition data to adjust prices depending on who a customer was.

That bill has been championed by retail workers’ unions such as the United Food and Commercial Workers.