• by Wendy Davis , 7 hours ago

New Jersey Governor Mikie Sherrill has signed a "surveillance pricing" bill that prohibits businesses from using shoppers' personal data -- including web browsing data and other information linkable to individuals -- to set grocery prices.

“The price New Jersey families pay at the grocery store should be based on the cost of a product, not on what invasive data collection suggests they may be willing to pay," Sherrill stated Thursday. 

The Fair Price Protection Act prohibits pricing based on personal data collected online and also in stores via sensors, cameras and biometric monitoring. The law applies to grocery stores as well as food delivery services such as Instacart.

The measure has exceptions for programs that give discounts to members of broad groups -- such as teachers or veterans.

The statute also allows stores to offer loyalty programs that give discounts to consumers based on their past purchases, provided that certain conditions are met, including that consumers opt in to the programs.

With Sherrill's move, New Jersey joins Maryland and Connecticut in banning some forms of customized pricing. Other states, including New York, are considering similar restrictions.

New York currently requires companies that use algorithms for personalized pricing to make the following disclosure: “This price was set by an algorithm using your personal data."  (That law currently faces a challenge by the National Retail Federation, which claims the disclosure mandate violates the First Amendment.)

Customized pricing, particularly for groceries, also is drawing increased scrutiny by federal regulators.

Earlier this year, the Federal Trade Commission called for comments regarding food delivery companies' practices, including the potential use of "personalized" pricing.

In response, 16 state attorneys general urged the agency to require food delivery services to disclose whether they set prices based on data about individuals, as well as how the price shown to an individual consumer varies from the price displayed to the general public.

The watchdog Consumer Reports went further, arguing that the FTC should issue regulations that would generally ban personalized pricing, but allow for "reasonable and well-scoped exemptions."

That organization noted it previously reported that Instacart charged varying prices for the same items in the same stores. For instance, according to that report, a box of 10 Clif Chocolate Chip Energy bars sold for $19.43, $19.99, and $21.99 on Instacart at a Safeway store in Seattle. (Two weeks after Consumer Reports published its findings, Instacart said it was ending "item price tests" on the platform.)

But the U.S. Chamber of Commerce said the FTC needs more information before regulating customized pricing.