New York City Council passes bill banning surveillance pricing with $1,000 fines

The New York City Council voted 44-5 on Thursday to pass a bill banning surveillance pricing. City Council Speaker Julie Menin sponsored the legislation, and the measure prohibits businesses from using personal data to set different prices for the same product, on websites and in stores alike. Surveillance pricing sets individualized consumer prices using personal information from devices such as computers and cell phones, including demographics, credit, browsing history and purchasing history. The practice happens online.

The city’s Department of Consumer and Worker Protection can impose fines of as much as $1,000 for each verified violation. Each consumer or transaction that breaks the ban counts as a separate finable instance. The measure excludes legitimate and transparent discounts and rewards such as buy-one-get-one-free offers, loyalty programs and discounts for veterans and students.

Menin said the legislation would not affect discounts, and she called charging different prices for the same product based on personal data unethical and a worsening of the affordability crisis. “We will continue fighting to lower prices and stop predatory corporate tactics,” Menin said. Mayor Zohran Mamdani said he supports the ban and described surveillance pricing as a way corporations squeeze working people. “when corporations use your personal data to decide what you pay, you only stand to lose,” Mamdani said.

Business groups cautioned that the prohibition might limit customer discounts or loyalty schemes. Uber spokesperson Josh Gold said the bill would reduce the ability of small restaurants with tight marketing budgets to connect with customers. Uber runs Uber Eats, which lets restaurants offer discounts tied to search history and past orders.

Widespread suspicion holds that different consumers pay varying amounts based on algorithms, even as food and other consumer goods prices increase while data brokers sell businesses detailed consumer profiles including spending habits and demographics. Many suspect supermarkets, ride-sharing firms and airlines commonly use surveillance pricing, although little public evidence exists.

An investigation cited by the Council found that Target shoppers paid more because of location data revealing whether they were inside a store or away from it. Shoppers found a 55-inch SmartTV priced at $499 on the Target app inside a store and $599 in the store parking lot. The app showed lower prices to shoppers browsing from home, and raised the price once GPS showed the phone had pulled into the store parking lot.

Research showed Uber increases fares when its app senses a low phone battery, exploiting the possibility that the rider may soon become stranded. Uber, Lyft, Target, Instacart and airlines have faced scrutiny for alleged surveillance pricing, and many of those companies have denied using the practice.

In 2022, Target paid $5 million to resolve a lawsuit filed by California district attorneys. The lawsuit said Target showed lower prices to customers in the parking lot than to customers in the store.

Last year, a San Francisco news outlet reported that changing a web browser’s location altered hotel prices shown to users. The report found customers in the Midwest and Phoenix paid less than customers in San Francisco for identical New York City hotel rooms.

Advocates have long accused Kroger of using surveillance pricing, a charge the company has steadfastly denied. Consumer Reports said Kroger uses advanced technology to monitor shoppers’ buying habits and sells the resulting data to outside companies for targeted ads. Kroger confirmed it uses digital price tags to change prices fast, but said those changes are not based on personal data.

The Federal Trade Commission, in October, required nine food delivery, airline, ride-sharing and retail companies to respond to detailed questions. The inquiry asks how businesses use personal information to charge some consumers more and pay certain workers less. Companies receiving the orders include major airlines, Uber, DoorDash, Walmart and Target.

Federal Trade Commission officials intend to examine the non-transparent method of pricing, which may disclose detailed information about individual shoppers. New York City is the second city nationwide to pass legislation banning surveillance pricing, after Seattle signed a similar ban into law last month.

In June, Albany lawmakers approved a law banning surveillance pricing both online and in physical stores, though certain exceptions apply. New York’s state measure is called the Algorithmic Pricing Disclosure Act. The act requires businesses to notify consumers when personal data is used to display a price, fines noncompliance, and does not ban surveillance pricing.

New York State lawmakers passed a comparable surveillance pricing measure in June, yet Governor Kathy Hochul has not signed the bill. Advocates worry Governor Kathy Hochul might rely on a New York law letting governors change bills on their own to soften the state measure’s wording.

New Jersey, Connecticut and Maryland already have similar prohibitions, though Maryland, Connecticut and New Jersey anti-surveillance pricing bills either demand only warnings or apply to specific goods such as food.

George Slover of the Center for Democracy and Technology said state legislators likely plan to introduce surveillance pricing bills when sessions begin early next year. Slover said consumers find it viscerally offensive to think businesses size them up for willingness to pay more.

Consumer Reports policy analyst Grace Gedye said eight million fewer people would no longer need to guess whether personal data shapes the price they see. Gedye said people will not have to guess whether their search history and online activity shape the price they see. Gedye said many businesses may need to change pricing practices, and firms already complying for New York City may extend the same approach nationwide.

A 2025 report from the Groundwork Collaborative and Consumer Reports estimates dynamic pricing cost consumers $1,200 a year, and a Federal Trade Commission study found surveillance pricing practices can boost a business’s profits by 4 percent. The Washington Center for Equitable Growth says the practice influences pay, and consultants use AI to help firms provide surveillance-based compensation to employees. The Mercatus Center at George Mason University called the practice a market efficiency, and the Computer & Communications Industry Association touted personalized discounts.