(The Center Square) — The high-tech industry is making a last-minute push to block a New York proposal that would restrict data-driven pricing by companies, claiming it would drive up costs for consumers.
In a letter to Albany lawmakers, the Chamber of Progress urged them to reject the One Fair Price Package that would ban big-box stores, retailers and grocery stores from using shoppers’ personal data to charge different customers different prices, a controversial practice known as surveillance pricing.
“We share the Legislature’s commitment to affordability, and that is precisely why the bill gives us pause,” the group wrote. “By treating a lower price as a harm to be policed, it would strip away the loyalty deals, digital coupons, and personalized savings that families count on to manage rising costs, all while making New York the test case for an experiment that is both untested and unpopular.”
The trade group, which includes Apple, Amazon and other big-tech companies, said while “businesses should not use personal data to charge an individual shopper more” the Democratic proposal “reaches well beyond that.”
“Its prohibition turns on whether a price was personalized at all, not on whether it went up or down,” the group wrote. “The bill treats a discount and a surcharge as the same offense, stopping companies not only from using a shopper’s data to charge them more but from using it to charge them less.”
The effort to ban the practice is backed by New York Attorney General Letitia James, a Democrat who has pushed for approval of new restrictions on algorithmic pricing as part of her consumer protection agenda.
Lawmakers who hope the measure is taken up before the end of the legislative session this week argue that the practice is fleecing consumers amid lingering inflation and other financial pressures.
“Companies are using personal data, like browsing history, device type, and even device battery level, to charge people different prices for the same product,” state Sen. Rachel May, D-Syracuse, said in a statement. “That kind of surveillance pricing is unfair, and we can’t allow it.”
The Democratic-led New York City Council is considering a package of bills that would ban surveillance pricing and restrict grocery stores from raising the price of an item more than once in a 24-hour period.
But critics point to a recent New York poll showing 70% opposed banning personalized discounts that depend on algorithms, against just 15% who supported a ban. The opposition crossed party lines, pollsters said.
In its letter, the chamber called on lawmakers to consider alternative plans “that protect consumers without taking their savings away,” saying the proposal as written would make New York an outlier.
“New York should not be the first state to rush this regime into law,” the center said. “Many states have weighed data-driven pricing legislation this year, and the few that have enacted anything have done so narrowly, with care to protect everyday savings.”
