Ahead of the Holiday Shopping Season, New Law Stops Hidden Algorithmic Price Setting on Online Retail Platforms, Designed To Help Consumers Make the Most of Their Purchasing Powers
Businesses Must Clearly Disclose to Consumers When Prices Are Set by Algorithms Using Their Personal Data
Governor Kathy Hochul today announced that her first-in-the-nation surveillance pricing law, General Business Law 349-a, designed to help consumers make the most of their purchasing power, is now in effect in New York State. Ahead of the holiday shopping season, New York State is making consumers aware of algorithmic price setting for online purchases. The new law requires businesses to clearly disclose to consumers when their prices are set by algorithms using their personal data.
“As we enter the busy holiday shopping season, New Yorkers deserve to know they are getting a fair deal when shopping online,” Governor Hochul said. “This new law shines the light on hidden online pricing tactics that take advantage of consumers. By requiring companies to be upfront when setting prices based on personal data, we are giving shoppers the transparency they need to make smart choices and keep more of their hard earned money in their pockets.”
As consumers spend more of their time and money online, especially during the holiday season, they're also sharing more information like browsing behavior, location, and purchase history with the companies they interact with. Today's technology means corporations are able to collect mountains of personal data, feed it into algorithms, and generate a price that's individual to a consumer. This practice, which the FTC has dubbed surveillance pricing, means a company could be charging you and your neighbor different prices for the same product, based on your individual willingness to pay. This practice is opaque and strips consumers of their ability to comparison shop and plan for the price of goods and services.
The new nation-leading law, championed by Governor Hochul in the FY26 Enacted Budget, requires businesses to disclose clearly to consumers when a price for a product was set by an algorithm using their personal data, subject to certain exceptions.
Assemblymember Nily Rozic said, “New Yorkers deserve transparency and fairness at every step of their online experience. This new law ensures consumers understand when algorithms and personal data are influencing the prices they see. I am proud that New York is leading the way in protecting shoppers and strengthening trust across the digital marketplace.”