New legislation in New York’s recent state budget mandates that businesses utilizing personal data to customize prices must disclose this practice. This includes charging higher prices based on a customer’s spending history.
Companies implementing personalized pricing are now obligated to inform consumers that their prices are determined by algorithms using their personal information, as reported by The New York Times.
The extent to which online retailers engage in this pricing strategy remains uncertain. Despite Uber’s compliance with the disclosure requirement in New York, the company claims to base its dynamic pricing solely on geography and customer demand, criticizing the law as vague and poorly drafted.
Although the National Retail Federation has challenged the legislation in court, a federal judge has permitted its enforcement to proceed.
Lina Khan, the former chair of the Federal Trade Commission and current co-chair of Zohran Mamdani’s mayoral transition team, views the law as a crucial tool for government oversight. However, she acknowledges the necessity for further regulations to govern this pricing practice effectively.
