New Jersey Moves to Restrict Surveillance Pricing with New Legislation

New Jersey is progressing towards limiting how retailers use shoppers’ personal data. Lawmakers approved the Fair Price Protection Act, a bill to prevent retailers and third-party grocery delivery platforms from using consumer data to set individual prices for identical grocery and food products. Governor Mikie Sherrill, a Democrat, will decide on signing the bill into law.

Significance of the Legislation

Artificial intelligence and consumer data use for price personalization have stirred debates. Retailers can now access extensive shopper information, such as online activity and purchasing trends. Critics view surveillance pricing as predatory, allowing varying charges for the same products based on personal data. Critics of restricting this practice warn of potential downsides, like challenges in offering personalized discounts through loyalty programs.

Details of the New Jersey Bill

The Fair Price Protection Act gained approval with a 22-14 vote in the Senate after a 51-20-1 passage in the Assembly. If enacted, it will prohibit using personal data, including electronic surveillance, biometric monitoring, genetic data, and protected class information, to determine grocery item prices in New Jersey. Thus, customers would not face different pricing for identical grocery items based on personal data.

Lawmakers’ Perspectives on Surveillance Pricing

Democratic State Senator Joe Lagana, a co-sponsor of the bill, labels surveillance pricing as “a modern form of consumer fraud” that manipulates prices based on private online behavior. He emphasizes that at a time when families struggle with rising costs, this bill would halt deceptive practices and ensure equal treatment for shoppers, without using their personal data against them.

Republicans in New Jersey criticized the bill, suggesting it might lead to “unintended consequences.” They warn that it could eliminate loyalty programs due to new restrictions on consumer data usage for discounts, potentially ending the benefits of programs like the ShopRite PricePlus card.

State Democrats clarified that the bill does not impede retailers from offering promotional discounts to broad categories such as teachers, veterans, and seniors or via loyalty programs.

The bill includes a one-year pause on new electronic shelf labels while the state examines if this technology fosters surveillance pricing. Retailers with existing electronic shelf labels can continue using them during this period.

Other States With Similar Measures

Maryland and Connecticut already have laws against surveillance pricing. Similar legislation in New York awaits the governor’s signature. Over 50 bills aimed at restricting or banning the practice have been introduced in 26 states, as reported by Money.com.

Next Steps

The Fair Price Protection Act awaits Governor Sherrill’s decision on its enactment. If signed, the law would come into effect one year later.