Speaker Julie Menin’s legislation would be among strongest nationwide, prohibiting businesses from using personal data to set individualized prices
NEW YORK – Today, the New York City Council will vote on Introduction 891-A, a bill sponsored by Speaker Julie Menin to ban surveillance pricing. The legislation would prohibit companies from using New Yorkers’ personal data and algorithms to set individualized prices. The bill, which is among the strongest surveillance pricing bans in the country, is part of the Council’s sweeping effort to protect New Yorkers against unfair business practices while tackling the city’s affordability crisis.
“The City Council is putting consumers first by ending the deceptive and insidious practice of surveillance pricing,” said Speaker Julie Menin. “When corporations use algorithms and personal data to charge different people different prices for the same products, it’s unethical and worsens our affordability crisis. We take consumer protection extremely seriously, and we will continue fighting to lower prices and stop predatory corporate tactics.”
The bill would give the Department of Consumer and Worker Protection the ability to investigate complaints and issue fines of up to $1,000 for each violation, with every consumer or transaction affected constituting a separate violation. The legislation also includes a corrective action for small businesses to help them avoid fines if violations are promptly addressed. Additionally, the bill allows for bona fide discounts and rewards that are legitimate and transparent, from buy-one-get-one-free deals and loyalty programs to discounts for veterans and students.
“In the midst of an affordability crisis surveillance pricing has emerged as yet another tactic for major corporations to leverage technology to ratchet up the cost of everyday goods for New Yorkers,” said Council Member Harvey Epstein, Chair of the Committee on Consumer and Worker Protection. “And when pricing is based on personal and biometric data, which is exactly what surveillance pricing relies on, the probability of discrimination skyrockets. I applaud Speaker Menin for bringing this bill forward and her dedication to protecting consumers and making our city more affordable.”
Surveillance pricing is invisible to consumers, making it difficult to identify, but reports suggest the practice is occurring in a variety of industries. One investigation found that a major grocery delivery platform was engaging in algorithmic pricing experiments that resulted in individualized price differences as high as 23 percent. Another investigation found that the price of a television at one retailer increased from $499.99 to $599.99 when the consumer pulled into the store’s parking lot. A behavioral economist who worked for a major ride-share company revealed that the application increases prices when a consumer’s phone battery is low because they might not otherwise be able to get home if they do not accept the high offer. The Council aims to end these predatory pricing practices in New York City.
Speaker Menin is a longtime champion of consumer protection. As commissioner of the Department of Consumer Affairs, Speaker Menin protected New Yorkers from unfair business practices while reducing unnecessary fines on small businesses. She also oversaw trailblazing investigations into exploitative industries, including for-profit colleges and fraudulent debt collectors.
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