Bipartisan and State-Level Crackdown on AI "Surveillance Pricing" Accelerates
A major legislative and regulatory wave is sweeping across the United States, targeting what regulators have termed "surveillance pricing"—the use of artificial intelligence, opaque algorithms, and extensive consumer data to set individualized prices for the same goods or services. These developments include a landmark federal policy proposal, new state-level bans, and intense lobbying battles over pending legislation.
The FTC's Proposed Enforcement Policy Statement
On August 19, 2026, the Federal Trade Commission (FTC) released a landmark "Proposed Enforcement Policy Statement Regarding Personalized Pricing," signaling a major federal regulatory shift under Chairman Andrew Ferguson. The proposed policy statement requires companies to "clearly and conspicuously disclose" if they are engaging in personalized pricing and the types of data they are using to set those prices.
Under the proposed policy, companies that engage in personalized pricing without revealing the practice and the data behind it could violate Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices. However, the FTC declined to take a position on whether some personalized pricing practices are unfair even when fully disclosed, drawing criticism from consumer advocates who argue that a disclosed price can still be an unfair one.
FTC Chairman Andrew Ferguson stated:
"When consumers see a listed price, they expect it to be the same price that everyone else sees, not the retailer’s estimate of how much they are willing to pay based on their personal data."
Lindsay Owens, executive director of the Groundwork Collaborative, criticized the disclosure-only approach:
"Chairman Ferguson makes it clear that he’ll let companies play semantics as long as they disclose what they’re doing. It shouldn’t be on consumers to navigate the fine print and sniff out if they’re being played. A disclosed price can still be an unfair one."
New Jersey and Other State-Level Bans
State legislatures have moved faster than the federal government to enact outright bans rather than mere disclosure regimes:
- New Jersey: On July 23, 2026, New Jersey became the third state (following Maryland and Connecticut) to enact a law banning "surveillance pricing" for groceries. The law imposes steep penalties of up to $50,000 per violation, treble damages, and a private right of action.
- Maryland and Connecticut: Bans on surveillance pricing in Maryland (for food retailers) and Connecticut (disclosure and restriction requirements) are scheduled to officially take effect on October 1, 2026.
New York's One Fair Price Act Under Intense Lobbying
In early June 2026, the New York State Legislature passed the One Fair Price Act (S.8623B/A.9349B), championed by Attorney General Letitia James. The bill, which represents the strongest state-level ban on surveillance pricing yet, prohibits businesses from using personal data—such as browsing history, real-time location, income, or purchase history—to generate individualized consumer prices.
The bill awaits a final decision by Governor Kathy Hochul. However, as of mid-August 2026, a powerful statewide coalition of businesses, trade associations, and technology industry groups (including Tech:NYC and the Travel Technology Association) is actively lobbying Governor Hochul to veto or seek revisions to the bill. They are urging her to distinguish "dynamic pricing" from "surveillance pricing" and to exempt consumer loyalty and discount programs.
In a letter to Governor Hochul dated August 7, 2026, the business coalition wrote:
"rather than 'specifically defining and targeting unethical conduct and practices, the bill takes a broader approach to capture any technology that incidentally influences a price or wage amount,' and that 'because of the broad sweep, the bill would punish differentially lower prices, not just higher prices.'"