The law is aimed at 'personalized' pricing, when consumers are charged based on Zip code or other factors
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Attorney General warns companies to disclose data-driven pricing practices
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New Yorkers urged to report violations as consumer protection law begins Nov. 10
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Businesses face fines for failing to notify shoppers when algorithms set prices
New York Attorney General Letitia James is warning businesses across the state that they must disclose when algorithms are setting prices based on consumers personal dataor face penalties under a new law taking effect November 10.
The Algorithmic Pricing Disclosure Act requires most companies using automated systems to adjust pricesoften called algorithmic or surveillance pricingto clearly display a notice stating:
THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.
James said the new law is designed to give consumers transparency and prevent companies from secretly charging higher prices based on individual factors like income, ZIP code, or shopping history.
The law is clear: if businesses use algorithmic pricing, they must notify consumers, James said in announcing the alert. New Yorkers deserve to know whether their personal information is being used to set the prices they pay. I will not hesitate to take action against those who try to mislead New Yorkers and use their personal information to manipulate prices without their knowledge.
Personalized pricing under scrutiny
Algorithmic pricing tools allow businesses to tailor prices in real time, often through apps or loyalty programs that track user behavior. Consumers might see one price while others are shown another for the same product or service.
The Attorney Generals office cited recent examples of consumers being charged:
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higher hotel rates when booking from high-income ZIP codes
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or variable prices inside Target stores when shoppers used the retailers mobile app.
Such practices, James said, blur the line between marketing and exploitation, and are now subject to stricter transparency rules.
How to spot algorithmic pricing
The Attorney Generals alert included several tips for identifying when algorithms might be affecting prices:
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Compare prices across devices or accounts. If one person sees a higher or lower price for the same product, it could indicate personalized pricing.
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Check discount patterns. If you receive exclusive digital offers others cant see, those prices may be based on your data.
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Note price changes after online activity. Searching for similar items elsewhere or shopping from a new location may trigger algorithmic adjustments.
Enforcement and consumer action
Businesses that fail to include the required disclosure face penalties of $1,000 per violation. James urged anyone who suspects undisclosed algorithmic pricing to file a complaint with the Office of the Attorney General (OAG).
Transparency is the first step toward fairness, James said. Companies that hide how they use your data to set prices will be held accountable.
What Consumers Can Do
Think youre being charged an algorithmic price by a business in New York? Heres how to check and report it.
1. Compare prices.
Search for the same item using a different browser, device, or accountor ask a friend to check. If prices differ, data-driven pricing could be at play.
2. Look for the disclosure.
By law, New York businesses using algorithmic pricing must display:
THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.
If you dont see it near the price, the business may be violating the new law.
3. Track sudden price shifts.
If a price changes after you log in, shop from a new location, or search for similar items online, it might be linked to your personal data.
4. Save evidence.
Take screenshots showing the differing prices or missing disclosure text. Note the date, time, and device used.
5. Report it.
File a complaint with the New York Office of the Attorney General online at ag.ny.gov or by calling 1-800-771-7755.
States that have passed laws
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New York: As reported above, New Yorks new law requires most companies using algorithmic pricing based on consumers personal data to clearly disclose that fact.
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California: California has passed bills (for example, AB 325 & SB 763) that regulate use of common pricing algorithms, especially in an antitrust/competition context (i.e., algorithmic price-fixing) rather than purely consumer-surveillance-pricing.
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Connecticut: In the housing/rental context, Connecticut passed a law banning certain automatic revenue-management tools that rely on non-public data for setting rents.
A large number of state bills are under consideration in various states. For example, one tracker shows at least 26 bills in 14 states addressing predictive or algorithmic pricing.
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Some laws target very narrow contexts (like rental pricing), others are broader. Many havent become law yet. Legal Blogs+1
Posted: 2025-11-07 18:13:17
















