Blab Tech
States Move to Block Retailers Use of Personal Data for Dynamic Pricing
Retailers have long been able to adjust prices in real time, but a growing coalition of states is now forcing them to stop using customers’ personal data in the process. On Thursday, Connecticut Governor Ned Lamont signed a law that bars retailers from tailoring prices based on any personally identifiable information (PII) such as browsing history, health status, or income. The same day, New York lawmakers passed the One Fair Price Act, a similar measure that awaits Governor Kathy Hochul’s signature and would take effect six months after approval. In Colorado, Governor Jared Polis vetoed a bill that would have prohibited companies from using consumer data to generate individualized prices.
Under Connecticut’s new law, effective July 1, 2027, retailers cannot use PII to set individualized prices. The measure follows Maryland’s earlier legislation, signed by Gov. Wes Moore in April, which became the first state law to ban price manipulation driven by real‑time surveillance data and is scheduled to take effect on October 1. Consumer Reports, which has long advocated restrictions on surveillance pricing, praised Connecticut’s bill and urged the state to clarify that consumers can pursue legal action independently.
The One Fair Price Act mirrors Connecticut’s approach. Attorney General Letitia James called the bill a “big victory” in the fight against surveillance pricing. If Governor Hochul signs, the law would be enforceable six months later. New York lawmakers are also considering additional legislation to prohibit food retailers and pharmacies from using electronic shelf labels—a move backed by the United Food and Commercial International Workers Union Local 1500, AARP New York, and the Retail, Wholesale and Department Store Union.
Colorado’s veto highlights the challenges of enacting broad price‑discrimination restrictions. Polis cited concerns that the bill’s language was too wide and could discourage legitimate uses of technology for price setting or discounting. In a letter to the Colorado State House, he stated that while he supports consumer protection from unethical price gouging, he was worried about discouraging acceptable uses of technology.
These state actions are part of a growing trend to curb dynamic pricing practices that rely on detailed consumer data. Dynamic pricing—also known as surveillance pricing—lets retailers adjust prices in real time based on demand and consumer characteristics. Critics argue that such practices can lead to unfair price discrimination, especially when sensitive data such as health or income is used.
The Federal Trade Commission has also taken notice. A recent FTC investigation probes companies that use personal data for price discrimination, and the agency has signaled potential rulemaking to protect consumer privacy and limit data‑driven pricing. The FTC’s focus on surveillance pricing aligns with the state‑level efforts to restrict individualized pricing.
While the Connecticut and New York laws set clear limits on the use of PII for price setting, they leave room for retailers to use non‑identifiable data or aggregate market signals. The laws also do not address the use of electronic shelf labels, a technology that can enable real‑time price changes. The proposed New York amendment to ban such labels reflects ongoing debate over how technology can be used responsibly in retail.
The broader impact of these laws will be seen in the coming months as retailers adjust their pricing systems to comply. The Connecticut law’s July 2027 effective date gives companies time to modify algorithms and data‑collection practices. New York’s law, pending executive approval, will be closely watched by retailers and consumer advocacy groups.
In summary, Connecticut and New York have enacted or advanced legislation that prohibits retailers from using personally identifiable data to customize prices, while Colorado’s veto underscores the policy trade‑offs involved. Federal scrutiny by the FTC and ongoing advocacy by Consumer Reports and other groups suggest that the debate over data‑driven dynamic pricing will continue to evolve.
Under Connecticut’s new law, effective July 1, 2027, retailers cannot use PII to set individualized prices. The measure follows Maryland’s earlier legislation, signed by Gov. Wes Moore in April, which became the first state law to ban price manipulation driven by real‑time surveillance data and is scheduled to take effect on October 1. Consumer Reports, which has long advocated restrictions on surveillance pricing, praised Connecticut’s bill and urged the state to clarify that consumers can pursue legal action independently.
The One Fair Price Act mirrors Connecticut’s approach. Attorney General Letitia James called the bill a “big victory” in the fight against surveillance pricing. If Governor Hochul signs, the law would be enforceable six months later. New York lawmakers are also considering additional legislation to prohibit food retailers and pharmacies from using electronic shelf labels—a move backed by the United Food and Commercial International Workers Union Local 1500, AARP New York, and the Retail, Wholesale and Department Store Union.
Colorado’s veto highlights the challenges of enacting broad price‑discrimination restrictions. Polis cited concerns that the bill’s language was too wide and could discourage legitimate uses of technology for price setting or discounting. In a letter to the Colorado State House, he stated that while he supports consumer protection from unethical price gouging, he was worried about discouraging acceptable uses of technology.
These state actions are part of a growing trend to curb dynamic pricing practices that rely on detailed consumer data. Dynamic pricing—also known as surveillance pricing—lets retailers adjust prices in real time based on demand and consumer characteristics. Critics argue that such practices can lead to unfair price discrimination, especially when sensitive data such as health or income is used.
The Federal Trade Commission has also taken notice. A recent FTC investigation probes companies that use personal data for price discrimination, and the agency has signaled potential rulemaking to protect consumer privacy and limit data‑driven pricing. The FTC’s focus on surveillance pricing aligns with the state‑level efforts to restrict individualized pricing.
While the Connecticut and New York laws set clear limits on the use of PII for price setting, they leave room for retailers to use non‑identifiable data or aggregate market signals. The laws also do not address the use of electronic shelf labels, a technology that can enable real‑time price changes. The proposed New York amendment to ban such labels reflects ongoing debate over how technology can be used responsibly in retail.
The broader impact of these laws will be seen in the coming months as retailers adjust their pricing systems to comply. The Connecticut law’s July 2027 effective date gives companies time to modify algorithms and data‑collection practices. New York’s law, pending executive approval, will be closely watched by retailers and consumer advocacy groups.
In summary, Connecticut and New York have enacted or advanced legislation that prohibits retailers from using personally identifiable data to customize prices, while Colorado’s veto underscores the policy trade‑offs involved. Federal scrutiny by the FTC and ongoing advocacy by Consumer Reports and other groups suggest that the debate over data‑driven dynamic pricing will continue to evolve.
