Maryland has become the first state in the US to ban surveillance pricing in grocery stores, a practice where retailers use personal data to set higher prices for individual customers. Governor Wes Moore signed the measure into law on Tuesday, stating that the state is 'pushing forward' to protect consumers from companies using analytics to maximise profits.
Surveillance pricing, also known as dynamic pricing, involves rapidly changing product costs based on consumer data such as location, internet search history and demographics. This means shoppers may pay different prices for the same items at the same time. Critics argue that businesses effectively charge each person the maximum they are willing to pay.
While Maryland's law focuses on grocery stores, the Federal Trade Commission (FTC) has documented similar practices in clothing, beauty, home goods and hardware stores. Consumer groups stress the urgency for grocery stores due to their impact on access to affordable food. Several other states, including Colorado, California, Massachusetts, Illinois and New Jersey, are considering similar legislation.
However, anti-surveillance advocates have raised concerns about loopholes in the law, which includes exemptions for loyalty programs and promotional offers. Tom McBrien of the Electronic Privacy Information Center noted that the law does not address price reductions, allowing companies to raise prices for everyone and then offer individualised discounts, effectively achieving the same outcome. Consumer Reports also criticised the law's 'weak enforcement provisions' and urged lawmakers to strengthen consumer protections.
Instacart, which faced scrutiny after a Consumer Reports investigation, announced it would stop using technology enabling differential pricing, though it stated it had never engaged in the practice. The harshest critics point to a provision that only allows the state's attorney general to enforce the law, removing the right for individuals to take legal action. Lee Hepner of the American Economic Liberties Project called the private right of action 'a fundamental piece of accountability'.
