New York state law takes aim at personalized pricing

New York’s latest state budget includes new disclosure requirements for businesses that use personal data to set different prices for different shoppers — for example, charging you more if you have a history of splurging.

Businesses that use personalized pricing are now required to tell customers, “This price was set by an algorithm using your personal data,” according to The New York Times.

It’s not clear how widespread this practice actually is among online retailers. An Uber spokesperson told the NYT that the company is now showing this disclosure to New Yorkers, although they described the law as “poorly drafted and ambiguous” and insisted that Uber only uses geography and customer demand to calculate its dynamic pricing.

The National Retail Federation filed a lawsuit to stop the law, but a federal judge allowed it to move forward.

Lina Khan, former chair of the Federal Trade Commission and now co-chair of the mayoral transition team for Zohran Mamdani, told the NYT that the law will be an “absolutely vital” tool for the government, but she also suggested there’s a “ton more work to be done” to regulate the practice.