New York state law takes aim at personalized pricing

New York has introduced a significant change in its state budget with new regulations aimed at businesses that utilize personal data for pricing strategies. This law mandates that companies disclose when they set different prices for consumers based on their personal data, such as charging higher rates for those with a history of spending more. According to reports from The New York Times, the law requires businesses to inform customers that their pricing was determined by an algorithm leveraging personal information. The extent to which this pricing strategy is being used by online retailers remains uncertain. For instance, an Uber representative shared with the NYT that the company has begun implementing this disclosure for its New York customers. However, they criticized the law for being “poorly drafted and ambiguous,” asserting that Uber's pricing is primarily influenced by geographic location and demand rather than individual data. In a legal response to this legislation, the National Retail Federation has filed a lawsuit challenging the law, but a federal judge has permitted it to proceed. Lina Khan, the former chair of the Federal Trade Commission and now a co-chair of the mayoral transition team for Zohran Mamdani, emphasized the importance of this law as an “absolutely vital” instrument for government oversight. Still, she acknowledged that there is significant work ahead to effectively regulate personalized pricing practices.