Maryland's Landmark Ban on Surveillance Pricing

Maryland has become the first state in the United States to pass legislation banning surveillance pricing, officially titled the Protection From Predatory Pricing Act. The Maryland state legislature approved the bill, which was introduced by Governor Wes Moore in January 2023, and it is set to take effect on October 1, 2023. The law prohibits grocery retailers and third-party delivery services from using personal data to set individualized prices for goods and services. Governor Moore emphasized the importance of this legislation, stating, "Marylanders deserve to know that the price they see on the shelf is the price they will pay at the register."

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Surveillance pricing involves companies using personal data—such as location, browsing history, and demographics—to determine how much a consumer is willing to pay for a product. This practice can lead to significant price discrepancies for the same item among different consumers, potentially costing shoppers up to $1,200 annually, according to Consumer Reports. The legislation aims to protect consumers from these practices, particularly as electronic shelf labels and advanced pricing technologies become more prevalent in grocery stores.

The Independent

Despite the passage of the bill, there are concerns regarding its effectiveness. Consumer Reports has pointed out that the legislation contains loopholes, such as exemptions for pricing associated with loyalty programs and weak enforcement provisions. The only entity allowed to sue companies for violations is the Maryland Attorney General, who must notify businesses and allow them 45 days to rectify any issues before further legal action can be taken. The United Food and Commercial Workers International Union has also called for a veto, arguing that the bill does not adequately protect consumers.

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Maryland's action is part of a growing trend, with at least a dozen other states, including Pennsylvania, Arizona, and New York, considering similar legislation against dynamic pricing. Pennsylvania has introduced a bill to prevent retailers from changing prices on essential goods within a 24-hour period. New York has already enacted the Algorithmic Pricing Disclosure Act, which requires businesses to disclose when they use algorithms to set prices.

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Consumer advocacy groups have urged other states to adopt stronger consumer protections in their legislation. Grace Gedye, a senior policy analyst at Consumer Reports, remarked, "While it’s encouraging to see the Maryland legislature take up this issue, this bill has loopholes that will limit its real-world impact." Governor Moore's office has expressed confidence in the bill's potential to protect consumers from exploitative pricing practices.

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As Maryland prepares to implement the Protection From Predatory Pricing Act, the focus will shift to how effectively the law can be enforced and whether it will inspire similar legislative efforts across the country. The ongoing scrutiny of surveillance pricing practices in various industries, including grocery retail and aviation, indicates that consumer protection will remain a significant issue in the coming years.

The Independent