backRecently introduced legislation in the U.S. Senate would ban so-called “surveillance pricing,” mirroring a companion House bill and marking the latest effort by federal and state authorities to prohibit such practices. This alert reviews the latest legislative developments following our recent update on this topic: California Attorney General Launches “Surveillance Pricing” Investigation Targeting Grocers, Hotels, and Retailers.
What is “Surveillance Pricing”?
“Surveillance Pricing”1While the genesis of the term “surveillance pricing” is not certain, it has been credited to Professor Zephyr Teachout, who wrote about this practice in February 2025. See Why 'Surveillance Pricing' Strikes a Nerve (Nov. 24, 2025). is the practice of using of consumer data—such as location history, internet browsing history, or demographic information—to set individualized prices for goods and services.2FTC Surveillance Pricing 6(b) Study: Research Summaries; A Staff Perspective (Jan. 2025). Customer behavior ranging from mouse movements on a webpage to the type of products that consumers leave unpurchased in an online shopping cart can be tracked and used by retailers to tailor consumer pricing.3 FTC Surveillance Pricing 6(b) Study: Research Summaries; A Staff Perspective (Jan. 2025). Surveillance pricing—and legislation that seeks to regulate it—has focused to date on grocers, brick-and-mortar and online retailers, airlines, hotels, and tech companies. But as affordability takes center stage in U.S. politics heading into the midterm elections in November, concerns about such practices are growing and may have a broader impact, including on rideshare companies, event ticket sellers, rental housing providers, financial services companies, and insurers.
Background - FTC Report and State Response
In 2024, the Federal Trade Commission (“FTC”) issued a preliminary report on surveillance pricing, which found that companies are using algorithms to automatically set prices for people based on their personal data, and warned that these algorithms could potentially set higher prices for vulnerable individuals predicted to spend more based on personal information, such as a new parent shopping for baby formula.4FTC Surveillance Pricing Study Indicates Wide Range of Personal Data Used to Set Individualized Consumer Prices | Federal Trade Commission (Jan. 17, 2025). The findings alarmed several state lawmakers, who thereafter introduced legislation to ban the practice in California, Colorado, Georgia, and Illinois. Each of those legislative efforts failed amid arguments from tech and retail industry lobbyists that the bills would prevent companies from offering customers personalized discounts and loyalty reward programs. This issue remains a priority for both federal and state lawmakers, however, as detailed below in efforts to advance legislation addressing surveillance pricing.
Federal Legislative Developments
On March 5, 2026, U.S. Senators Ben Ray Luján (D-NM) and Jeff Merkley (D-OR) introduced the Stop Price Gouging in Grocery Stores Act, a companion bill to House legislation introduced in August 2025 by Representatives Rashida Tlaib (D-MI) and Val Hoyle (D-OR).5H.R. 4966, Stop Price Gouging in Grocery Stores Act (Aug. 2025). Both bills would prevent retail food stores from using consumers’ personal data to set prices. In a statement introducing the Senate bill, Senator Luján stated, in part, “Congress must act to ensure that technologies are being used to improve the lives of Americans, not increase their grocery bills. Our friends, family, and neighbors should be able to shop at their local grocery store without worrying about predatory pricing.”6Luján, Merkley Introduce Legislation to Stop Grocery Price Gouging and Lower Costs for Americans (Feb. 12, 2026). The United Food and Commercial Workers International Union (“UFCW”), which represents 1.2 million food and commercial workers, also launched a national campaign on March 5, 2026, calling on lawmakers to pass this legislation.7 Support Affordable Groceries - The United Food & Commercial Workers International Union. Endorsing the bill, UFCW International President Milton Jones stated, “The UFCW wholeheartedly endorses the Stop Price Gouging in Grocery Stores Act and applauds Congresswoman Tlaib’s leadership on this issue. […] ‘Surveillance pricing’ is deeply unfair, potentially discriminatory, and must be banned.”8UFCW Endorses U.S. Rep. Tlaib’s Stop Price Gouging in Grocery Stores Act (Aug. 13, 2025).
While no Republicans have signed onto federal surveillance pricing legislation yet, Senator Josh Hawley (R-MO) publicly criticized airlines for using data to set prices at a hearing last September, indicating this could become a bipartisan concern.9Senators Blumenthal, Hassan, & Hawley Letter to Spirit, Frontier, and Navitaire Airlines (Jan. 22, 2025). In their letter to the CEOs of Spirit Airlines and Frontier Airlines, Senators Hawley, Richard Blumenthal (D-CT), and Maggie Hassan (D-NH) wrote, “Your lack of transparency raises concerns that your airlines use customers’ personal information to manipulate seat pricing” and urged the companies to “immediately end the practice of collecting customer information before providing pricing for seat fees.”10Senators Blumenthal, Hassan, & Hawley Push Budget Airline Executives to Lower Costs for Passengers & to End Use of Charging Higher Feeds Based on Customers’ Information (Jan. 24, 2025).
State Legislative Developments
Since the beginning of the year, state lawmakers also have been revisiting proposals to ban surveillance pricing in Arizona11On January 20, 2026, Arizona introduced an act prohibiting surveillance pricing. State of Arizona, HB2489 (2026)., Maryland12On January 20, 2026, Maryland introduced the Protection from Predatory Pricing Act. State of Maryland, SB0387 (2026)., Nebraska13On January 13, 2026, Nebraska introduced the Protecting Consumers and Jobs from Predatory Pricing Act. State of Nebraska, LB1006 (2026)., New York14New York’s Algorithmic Pricing Disclosure Act became effective November 10, 2025. State of New York, AB A6765A (2025). New York has also introduced two additional bills aimed at prohibiting grocery stores and pharmacies from using personalized algorithmic pricing, banning most businesses in New York—with exceptions for financial institutions, insurance companies, and ride-share services—from using personal data to make prices fluctuate. State of New York, SB S8616 (2025); State of New York, AB A09396 (2025); State of New York, SB S8623 (2025); State of New York,, AB A09349 (2025)., Oklahoma15On February 2, 2026, Oklahoma introduced the Protecting Consumers and Jobs from Predatory Pricing Act. State of Oklahoma, HB3959 (2026)., Pennsylvania16On March 2, 2026, Pennsylvania introduced legislation that would prohibit promoting or engaging in dynamic pricing. State of Pennsylvania, PN1482 (2026) , Tennessee17On January 23, 2026, Tennessee introduced an act prohibiting foot retail establishments from using personalized algorithmic pricing. State of Tennessee, HB2052 (2026)., and Washington18On January 28, 2026, Washington introduced HB 2481 – Prohibiting surveillance-based price discrimination and surge pricing for retail goods. State of Washington, HB2481 (2026).. Pennsylvania is the latest state to introduce this type of legislation, with State Senator Lindsey M. Williams (D-Allegheny) introducing the Surveillance Pricing Act with a strong message to corporations: “Families are already facing higher than ever prices at the grocery store, and now greedy corporations are using AI and personal information to manipulate them into paying more than their neighbor.”19 Senator Lindsey M. Williams Announces Legislation to Prohibit Surveillance Pricing (Dec. 15, 2025). She continued, “A billionaire owned corporation deciding that you can pay more for basic necessities based on your harvested personal data is not how we do business in Pennsylvania.”20 Id.
It is also notable that New York has enacted a surveillance pricing law, although this law does not ban the practice, but rather increases disclosure obligations. New York’s Algorithmic Pricing Disclosure Act went into effect November 2025 and requires companies to disclose when personal data is used to set prices.21Attorney General James Warns New Yorkers About Algorithmic Pricing as New Law Takes Effect (Nov. 5, 2025). Prior to the law’s implementation, the National Retail Federation challenged New York's disclosure requirement in July 2025, arguing the disclosures violated their free speech rights; however, a federal judge dismissed the complaint in October 2025, ruling that the government had a legitimate interest in ensuring customers are informed about prices.22Nat’l Retail Fed’n v. James, No., 806 F. Supp. 3d 427 (S.D.N.Y. 2025). In addition to this existing law, New York Democrats in the legislature are trying to advance S8616/A9396, aimed at prohibiting grocery stores and pharmacies from using personalized algorithmic pricing, and S8623/A9349, the One Fair Price Act, aimed at banning most businesses in New York—with exceptions for financial institutions, insurance companies, and ride-share services—from using personal data to make prices fluctuate.23State of New York, SB S8616 (2025); State of New York, AB A09396 (2025); State of New York, SB S8623 (2025); State of New York,, AB A09349 (2025).
State Enforcement Actions
We also expect to see increased enforcement action on this front. For instance, on January 27, 2026, California Attorney General Rob Bonta announced an investigation into surveillance pricing and 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. The California Attorney General's office intends to investigate whether conduct related to surveillance pricing violates the California Consumer Privacy Act (“CCPA”).24On Data Privacy Day, Attorney General Bonta Focuses on Surveillance Pricing, Compliance with California Consumer Privacy Act (Jan. 27, 2026). Additionally, the investigation may examine compliance with AB 325, a new California law making it unlawful to engage in algorithmic price-fixing – the use of shared pricing algorithms to coordinate prices among businesses. We expect other states to take similar action in 2026 and particularly, in those states with in-cycle Attorneys General.25State of California, AB 325 (2025); California Attorney General Launches "Surveillance Pricing" Investigation Targeting Grocers, Hotels, and Retailers (Feb. 2, 2026).
Recommendations
The growing wave of state and federal legislative activity signals heightened regulatory scrutiny of data-driven pricing practices nationwide and likely enforcement activity across the country. Businesses that use personalized pricing strategies should proactively assess their practices and ensure compliance with applicable privacy, anti-monopoly, and civil rights laws.
In light of this evolving legislative and enforcement landscape, companies in the tech, retail, service, grocery, and hospitality 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 Multi-State Compliance. Review your compliance with applicable state privacy laws, including consumer rights to opt out of the sale or sharing of personal information and to know what personal information is being collected. Pay close attention to the existing New York Algorithmic Pricing Disclosure Act, which requires companies to disclose when personal data is used to set prices. Additionally, consider how adjacent algorithmic pricing laws, such as California’s AB 325, may impact your organization.
- 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 applicable state and federal law.
State and federal legislative activity signals heightened regulatory scrutiny of data-driven pricing practices nationwide. Businesses that use personalized pricing strategies should proactively assess their practices and ensure compliance with applicable privacy, anti-monopoly, and civil rights laws.