backOn January 27, 2026, California Attorney General Rob Bonta announced the launch of an investigation into “surveillance pricing” practices, which involves companies using customers’ personal data—such as location, browsing history, or demographic information—to set individualized prices for goods and services.1https://oag.ca.gov/news/press-releases/data-privacy-day-attorney-general-bonta-focuses-surveillance-pricing-compliance. This alert summarizes the investigation and provides recommended next steps for companies that may be affected.
Who Is Being Targeted
The Attorney General has directed the California Department of Justice to send inquiry letters directly to grocers, hotels, and retailers “with significant online presence” focused on whether they use consumer personal information to set prices. Businesses in these industries should be prepared for the potential California inquiry and related media attention, as well as parallel state and federal investigations, and should proactively review their consumer privacy and pricing practices.
Scope of the Investigation
Businesses that engage in “surveillance pricing” should anticipate that California will ask for information including:
- Companies’ use of consumer personal information to set prices.
- Policies and public disclosures regarding personalized pricing.
- Any pricing experiments they have undertaken.
- Measures companies are taking to comply with algorithmic pricing, competition, and civil rights laws.
Based on public reporting, the California Attorney General's office also intends to investigate whether conduct related to surveillance pricing violates the California Consumer Privacy Act (“CCPA”).2https://subscriber.politicopro.com/article/2026/01/california-ag-launches-surveillance-pricing-probe-00751636.
The investigation follows the enactment of AB 325 in the prior legislative session, which updated California's anti-monopoly codes to ban anti-competitive algorithmic pricing schemes. Businesses should be aware that this investigation may examine compliance with this new law, in addition to the CCPA and other civil rights laws.
Potential Consequences
This investigation could yield fines and settlements for companies found to have committed violations. For context, a similar data privacy enforcement effort related to streaming services and smart TVs announced by the California Attorney General's office in 2024, resulted in a $530,000 settlement with one streaming service.3https://oag.ca.gov/news/press-releases/attorney-general-bonta-secures-530000-settlement-sling-tv-first-enforcement. The Attorney General’s office has also pursued recent enforcement actions targeting data brokers, mobile gaming apps, and business loyalty programs.4See https://oag.ca.gov/news/press-releases/attorney-general-bonta-announces-investigative-sweep-location-data-industry, https://oag.ca.gov/news/press-releases/ahead-data-privacy-day-attorney-general-bonta-focuses-mobile-applications, https://oag.ca.gov/news/press-releases/data-privacy-day-attorney-general-bonta-puts-businesses-operating-loyalty.
Recommended Actions
In light of this investigation, companies in the grocery, hospitality, and retail sectors should consider taking the following steps:
- Review Pricing Practices. Assess whether your organization uses any customer personal data—including location data, browsing history, demographic information, or loyalty program data—to influence or set prices for goods or services.
- Audit Privacy Policies. Ensure that your company's privacy policies accurately disclose how consumer data is collected, used, and shared, particularly in connection with pricing decisions.
- Evaluate CCPA Compliance. Review your compliance with the California Consumer Privacy Act, including consumer rights to opt out of the sale or sharing of personal information and to know what personal information is being collected.
- Assess Algorithmic Pricing Tools. If your organization utilizes algorithmic or AI-driven pricing tools, evaluate whether these tools may implicate anti-monopoly or civil rights concerns under California law, including AB 325.
Conclusion
Attorney General Bonta’s announcement signals heightened regulatory scrutiny of data-driven pricing practices in California and may signal that additional state and federal investigations are on their way. Businesses that use personalized pricing strategies should proactively assess their practices and ensure compliance with applicable privacy, anti-monopoly, and civil rights laws.
King & Spalding’s Special Matters Team has extensive experience advising clients in relation to consumer protection investigations and related enforcement actions in California, Washington D.C., and nationwide, including matters related to pricing and net weight content accuracy, sale of out-of-date products, storage and disposal of hazardous waste, and state beverage redemption fees. The Team includes key personnel throughout California including Sacramento, San Francisco, and Los Angeles, and brings deep trial and internal investigation experience as well as strong credibility with federal and California prosecutors. They routinely and consistently deliver strategic crisis response, efficient fact development, strategic counsel and representation, and practical remediation that positions clients for favorable outcomes with federal, state, and local authorities.