New York Enacts Groundbreaking Law on Personalized Pricing

In November 2025, New York became the first state to implement a law targeting personalized pricing, also known as surveillance pricing, which allows retailers to set different prices for consumers based on their personal data and shopping history. This law, enacted through the state budget, mandates that businesses using such pricing strategies must disclose to customers that their prices are determined by algorithms utilizing personal data. The required disclosure reads: “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.”

NY Forces Companies to Admit When Algorithms Set Your PricesNew York TimesTechCrunch

The law aims to protect consumers from potential price discrimination, where individuals may be charged more based on their previous purchasing behavior. For instance, a shopper with a history of buying high-end products might face inflated prices compared to others. The legislation has garnered mixed reactions; while it is seen as a significant step towards regulating data use in pricing, critics argue that it may lead to confusion among consumers and impose burdens on businesses.

New York Times

Uber has publicly complied with the law, displaying the mandated disclosure to its New York users. However, the company has criticized the law as “poorly drafted and ambiguous,” asserting that its pricing algorithms primarily consider geographic factors and customer demand rather than individual shopping habits.

NY Forces Companies to Admit When Algorithms Set Your Prices

The National Retail Federation filed a lawsuit to block the law, arguing that it would create unnecessary confusion and compliance challenges for retailers. Despite these efforts, a federal judge allowed the law to proceed, marking a pivotal moment for algorithmic pricing transparency in the retail sector.

NY Forces Companies to Admit When Algorithms Set Your Prices

Lina Khan, former chair of the Federal Trade Commission and now co-chair of the mayoral transition team for Zohran Mamdani, has expressed strong support for the law, calling it an “absolutely vital” regulatory tool. She emphasized the need for further work to effectively regulate personalized pricing practices.

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The enactment of this law positions New York as a potential testing ground for more stringent regulations on algorithmic pricing nationwide. It creates a framework for real-time audits of data-driven pricing practices, offering regulators enhanced visibility into how companies utilize consumer data in their pricing strategies.

NY Forces Companies to Admit When Algorithms Set Your Prices

As the retail landscape evolves, the implications of this law may extend beyond New York, influencing how other states approach the regulation of personalized pricing and consumer data usage.

New York Times

• “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” — New York State Law

New York Times

• “poorly drafted and ambiguous” — Uber Spokesperson

TechCrunch

There is uncertainty regarding the prevalence of personalized pricing among online retailers, with no clear data indicating how widespread the practice is. Additionally, some consumer rights groups argue that the law may not provide sufficient protection against price gouging, suggesting that further measures may be necessary.

New York Times