New York is on the verge of becoming one of the toughest states in the country on algorithm-driven pricing after lawmakers approved legislation that would prohibit businesses from charging different prices based on a consumer's personal data, browsing behavior or online activity.
The New York State Legislature passed the One Fair Price Act on June 5, sending the measure to Governor Kathy Hochul for consideration. If signed into law, the legislation would make New York the third state this year, after Maryland and Connecticut, to ban what consumer advocates call "surveillance pricing."
The bill targets a growing practice in which companies use personal information collected from consumers to determine how much they are willing to pay for a product. Rather than setting prices based solely on supply, demand or inventory, some businesses use data points such as browsing history, location information, purchasing habits and demographic profiles to generate individualized prices.
Supporters of the legislation argue that consumers often have no idea such systems are being used. Under the proposed law, businesses would be prohibited from using personal data to charge different customers different prices for the same product. Companies would also be required to disclose when automated pricing systems are being used.
The measure gives enforcement authority to New York Attorney General Letitia James' office and establishes significant penalties for violations. The legislation would impose fines beginning at $5,000 for an initial offense and up to $20,000 for repeat violations, with each instance potentially treated as a separate violation.
Not all forms of differentiated pricing would be prohibited. The legislation preserves discounts tied to loyalty programs as well as special pricing for groups such as seniors, students, military personnel and teachers. Lawmakers said the goal is to stop companies from exploiting personal data to increase prices, not eliminate traditional discount programs.
Momentum behind the legislation accelerated after a series of investigations raised questions about how retailers and technology platforms were using consumer information. A December 2025 investigation conducted by Consumer Reports, Groundwork Collaborative and More Perfect Union found substantial price differences among shoppers purchasing identical products.
Researchers examined nearly 400 consumers across multiple cities and reported that 74% of products showed at least two different prices. According to the investigation, some items carried price gaps of as much as 23%.
Consumer Reports estimated that such variations could cost a typical family of four up to $1,200 annually. Instacart, which was examined as part of the investigation, acknowledged price differences but said they reflected limited A/B testing rather than surveillance pricing. The company ended the program shortly after the report was published.
Federal regulators have also expressed growing concern. Earlier this year, the Federal Trade Commission released findings from a study examining how companies use consumer data to tailor pricing. The agency found that information including online behavior, mouse movements and abandoned shopping carts could be incorporated into pricing algorithms.
Attorney General James has emerged as one of the legislation's most vocal supporters. Speaking at a May rally backing the proposal, she said, "When New Yorkers place an order online or go to the grocery store, they should be able to trust that they are seeing the same prices as everyone else."
She added, "At a time when New Yorkers are already facing higher prices everywhere they look, we must use every tool available to us to protect New Yorkers and keep costs down."
State Senator Rachel May, the bill's primary sponsor, framed the issue as one of fairness and transparency.
"New Yorkers shouldn't have to wonder if the price they see is based on who they are instead of what they're buying," May said.
