New York City has passed legislation banning companies from using consumers’ personal data to charge different prices for identical products and services. On November 12, the New York City Council voted 44-5 to approve a bill that would end the practice of “surveillance pricing”, which is backed by Mayor Zohran Mamdani.
The legislation, sponsored by City Council Speaker Julie Menin, is designed to stop companies from using a customer’s browsing habits, shopping behaviour, demographics and social media habits to target each customer with an individual price. Announcing the decision in a post on X (formerly Twitter), said the practice could make customers pay more for the same product. He also joked that his declaration will not be altered in an incognito window.
The act is designed to prevent companies from charging different prices for the same product or service based on consumer information from their customers. Questions raised by it include whether businesses might be able to measure, through digital tracking and customer profiling, to identify how much individual shoppers are willing to pay.
Council Speaker Julie Menin told a crowd at City Hall that surveillance pricing is an unfair practice by companies that could negatively impact consumers.
She said companies could use information such as demographics, browsing history, shopping patterns and social media activity to charge different prices to shopping for the same product at the same time.
A number of big companies, including , Lyft, Target, Instacart and airlines, have come under fire for claims of surveillance pricing. The practice has been criticised for the ways in which businesses can collect and leverage customer information for personalising prices.
However, several companies have denied engaging in surveillance pricing. The new law is intended to set limits on data-driven price discrimination, not give companies the freedom to set different prices based on the personal information they have on individuals.
Companies found violating the new legislation could face $1,000 fine, according to the bill. There are also conditions that permit businesses to continue offering eligible promotional prices under transparent loyalty programmes and some discounts.
The change comes as New York City tries to boost consumer protections in a world where companies are increasingly turning to digital data and algorithms to tailor their pricing.
