Maryland has become the first state in the United States to ban surveillance pricing in grocery stores, a practice where retailers use personal data to set individualized prices. Governor Wes Moore signed the measure into law on Tuesday, marking a significant step in consumer protection against data-driven price discrimination.
What Is Surveillance Pricing?
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 different shoppers may pay different prices for the same item at the same store. Critics argue that businesses effectively charge each person the maximum they are willing to pay.
While Maryland's law specifically targets grocery stores, the Federal Trade Commission (FTC) has documented similar practices in clothing, beauty, home goods, and hardware sectors. Consumer groups emphasize the urgency for grocery stores, as they directly affect access to affordable food.
State and Federal Context
Maryland is not alone in addressing surveillance pricing. Similar bills are under consideration in Colorado, California, Massachusetts, Illinois, and New Jersey. At the federal level, the FTC under the Biden administration launched an investigation and published findings in January 2025, revealing extensive use of personal data in pricing. However, current FTC Chair Andrew Ferguson has criticized the previous report, reducing expectations of federal action. Tom McBrien, counsel at the Electronic Privacy Information Center (Epic), notes that state action is crucial given federal inaction.
Loopholes and Criticism
Despite its pioneering status, the law faces criticism from anti-surveillance advocates. The legislation includes exemptions for loyalty programs and promotional offers, which critics argue allow companies to achieve similar outcomes. For instance, a retailer could raise base prices for everyone and then offer individualized discounts, effectively recreating surveillance pricing. McBrien warns that such exemptions make it harder for consumers to detect unfair practices.
Consumer Reports, which investigated Instacart's pricing, praised the focus but decried weak enforcement. The organization urged Maryland lawmakers to strengthen protections and remove loopholes. Instacart announced it would stop using technology that enables differential pricing after the Consumer Reports investigation, and the company stated it supports the law's core principle that prices should not be personalized based on individual data.
Enforcement Concerns
Critics also point to enforcement limitations. The law only allows the state's attorney general to enforce it, not individuals. Lee Hepner of the American Economic Liberties Project argues that a private right of action is essential for accountability. He warns that other states might replicate Maryland's bill as a model, which could undermine stronger consumer protections. Hepner describes the Maryland bill as an industry-written permission slip for ongoing discrimination.
As the debate continues, Maryland's law sets a precedent but highlights the challenges of regulating data-driven pricing in the digital age.
