Surveillance pricing meaning
Surveillance pricing is the practice of charging different people different prices for the same product based on data collected about them. Connecticut's 2026 statute defines it as establishing a customized price for a consumer or group of consumers based, in whole or in part, on the consumer's personal data, as quoted in Sidley Austin's October 2026 survey of the state laws. The same practice is called personalized pricing by the FTC and algorithmic pricing in New York's disclosure law.
It is different from dynamic pricing, where everyone sees the same price and it changes with demand, such as concert tickets or rideshare surge. It is also different from ordinary discounts that anyone can claim on the same terms, such as student, senior or military pricing. The legal line in most new laws is whether the price turns on data about you as an individual, and whether you were told.
How does surveillance pricing work?
A seller, or a pricing vendor working for the seller, collects data about a shopper, feeds it into a model that estimates what that shopper is willing to pay or how likely they are to buy, and sets or adjusts the offer accordingly. The FTC's 2024 study focused on these intermediaries: companies that sell pricing and promotion tools to retailers. Staff reported that the intermediaries it examined worked with at least 250 clients, from grocery stores to apparel retailers, according to the FTC's January 2025 release.
Data used
The FTC's orders described data such as location, credit history and browsing history as inputs that pricing tools can use. The January 2025 staff findings said the tools can be aimed at a spectrum of targeting, from store-level pricing and promotions to individually targeted prices, per the staff research summaries. New laws also reach data gathered in physical stores; Connecticut's definition covers biometric monitoring, cameras and device tracking.
Surveillance pricing example
The best documented example comes from a December 2025 investigation by Consumer Reports, the Groundwork Collaborative and More Perfect Union. Shoppers placing identical Instacart orders at the same Safeway and Target stores at the same time were shown different prices: about 74 percent of items appeared at more than one price, with the gap between highest and lowest averaging 13 percent, according to Consumer Reports. The study found no evidence that prices tracked age, income, gender or race; it showed experimental price variation, not proof of personal-data targeting. Instacart said it was testing price offsets and later said it would end the experiments.
Is surveillance pricing legal?
In most of the United States, yes, as long as it is not deceptive, unfair or discriminatory on a protected basis. No federal statute bans personalized pricing. The FTC has said Congress has not given it authority to prohibit personalized pricing in all circumstances, but that it will act against deceptive or unfair practices under Section 5 of the FTC Act, according to the agency's proposed policy statement as quoted by Sidley. The practical federal rule is disclosure: hiding the use of personal data to set a unique price is the conduct most likely to draw enforcement.
State law is where outright bans exist. Maryland's ban for food retailers and delivery services has been in force since October 1, 2026, and Connecticut and New Jersey bans take effect in 2027. New York requires a disclosure label. Other limits come from existing law: price differences that track race or sex can violate civil rights and credit laws, and California's attorney general has argued that using personal data for pricing can breach the California Consumer Privacy Act's purpose limitation principle.
What did the FTC surveillance pricing study find?
On July 23, 2024, the FTC voted 5 to 0 to issue Section 6(b) orders to eight companies that sell pricing tools: Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co., according to the FTC's announcement. A 6(b) study gathers information without a specific enforcement purpose.
On January 17, 2025, staff released preliminary findings based on documents from six of the eight: Mastercard, Accenture, PROS, Bloomreach, Revionics and McKinsey. The findings described a wide range of personal data used in pricing tools and offered hypothetical examples, because the agency releases only aggregated or anonymized data. Then-Commissioners Andrew Ferguson and Melissa Holyoak dissented from releasing the summaries, with Ferguson calling them far from a full report, according to the FTC's January 2025 release and the dissent.
Under Chairman Ferguson, the FTC changed course in 2026 rather than dropping the issue. On August 19, 2026, it proposed an enforcement policy statement on personalized pricing focused on undisclosed use of personal data; the comment period closed in September and no final statement had issued as of late October 2026. In October 2026 it sent new 6(b) orders to Delta, United, JetBlue, Lyft, Uber, DoorDash, Instacart, Target and Walmart, seeking how they set prices and gig worker pay, and said the 2024 study had looked only at middlemen, per the FTC's October 2026 release. Recipients have 45 days to respond.
Which states have surveillance pricing laws?
As of November 9, 2026, three states have enacted bans or restrictions and one requires disclosure. The table reflects the enacted statutes as summarized by Sidley's October 26, 2026 survey.
| Jurisdiction | Law | Type | Who it covers | Effective |
|---|---|---|---|---|
| New York | Algorithmic Pricing Disclosure Act, Gen. Bus. Law § 349-a | Disclosure | Businesses using personalized algorithmic pricing | July 8, 2025 |
| Maryland | Protection from Predatory Pricing Act, H.B. 895 (2026) | Ban | Food retailers and third-party delivery providers | October 1, 2026 |
| Connecticut | Public Act 26-130 | Ban plus disclosure | Retail sellers and food delivery; others must disclose | July 1, 2027 (pricing provisions) |
| New Jersey | Fair Price Protection Act (2026) | Ban | Groceries and other necessities; private right of action | August 1, 2027 |
| Seattle | Fair Pricing and Transparency Ordinance | Ban | Covered retailers | September 1, 2027 |
| New York | One Fair Price Act, S. 8623-B | Ban (pending) | Broad; also data sellers | Passed June 2026, not signed |
New York's disclosure law, effective July 8, 2025, requires businesses that set prices with an algorithm using personal data to show the words "This price was set by an algorithm using your personal data" at or near the price, with penalties of up to $1,000 per violation, per Clark Hill's summary of the statute. It also bars using protected class data to set different prices. The National Retail Federation challenged the label on First Amendment grounds in National Retail Federation v. James, No. 1:25-cv-05500 (S.D.N.Y.), and the court dismissed the challenge on October 8, 2025, holding the disclosure purely factual and uncontroversial, according to Clark Hill. The retailers took the case to the Second Circuit, Bloomberg Government reported. Maryland enforces through its attorney general only, with a 45-day cure period and an exception where a consumer agrees to share data for a price. Colorado's governor vetoed a ban on June 2, 2026. California has no surveillance pricing statute; its attorney general announced a focus on surveillance pricing under the CCPA on January 27, 2026. For broader state AI rules, see the legislation tracker.
Is surveillance pricing real? Who uses it
The tools are real and sold openly: the FTC's 2024 orders went to companies that market AI pricing and promotion software, and staff found at least 250 retail clients among the intermediaries it reviewed. What is harder to show is how often a given retailer sets individual prices from personal data, because the price a shopper sees rarely says how it was set. That gap is why New York and Connecticut require a label and why the FTC's October 2026 orders go directly to the companies that set prices.
Receiving an FTC 6(b) order is not an accusation. The nine companies ordered in October 2026 were chosen because their industries use variable pricing or pay, and the FTC has said it wants to learn whether personal data drives those differences. The Instacart study shows price testing can produce different prices for identical carts; it did not establish that those prices were based on each shopper's data. Claims about any specific company should be read against the source and its date.
How to prevent surveillance pricing
No single step removes personal data from pricing, but several reduce what sellers can use and make price differences easier to spot.
- Compare before you buy. Check the same item logged out, in a private window, or on a second device or account. A persistent difference for the same item, time and location is worth noting.
- Look for the label. In New York, a price set by an algorithm using your personal data must say so. Connecticut adds a similar label requirement for non-retail sellers in 2027.
- Use privacy rights. In states with consumer privacy laws, including California, you can opt out of the sale or sharing of personal information and limit cross-site tracking, which narrows the data available to pricing tools.
- Weigh loyalty programs. Many laws exempt bona fide loyalty programs, and Maryland lets consumers agree to share data in exchange for a price. Joining trades data for discounts that may not be uniform.
- Report it. Suspected deceptive pricing can be reported to the FTC at ReportFraud.ftc.gov or to your state attorney general, which enforces the Maryland, Connecticut and New York laws.
For how these rules sit within wider AI consumer protection, see the AI at work and money hub and the rights hub.
Using personal data to set an individual price is still legal in most of the US, but three states now ban it in some sectors. Maryland's ban for food retailers and delivery apps took effect October 1, 2026, Connecticut and New Jersey bans start in 2027, and New York requires disclosure. Businesses that hide the practice risk FTC scrutiny, since the agency treats hidden use as potentially deceptive.
What changed
- 2026-11-09: Page published with state law status as of this date.
- 2026-10-05: Seattle's Fair Pricing and Transparency Ordinance signed; effective September 1, 2027.
- 2026-10-01: Maryland's Protection from Predatory Pricing Act took effect.
- 2026-08-19: FTC proposed an enforcement policy statement on personalized pricing.
- 2026-07-23: New Jersey's Fair Price Protection Act signed; ban effective August 1, 2027.
- 2026-04-28: Maryland Governor Wes Moore signed H.B. 895, the first state surveillance pricing ban.
- 2025-01-17: FTC staff released preliminary findings from the 6(b) surveillance pricing study.
Frequently asked questions
What is surveillance pricing?
Surveillance pricing is charging a specific person or group a customized price based on their personal data, such as location, browsing history, purchase history or device. It differs from dynamic pricing, where prices change with demand but everyone sees the same price at the same moment.
Is surveillance pricing legal?
In most of the US it is legal if it is not deceptive or discriminatory. Maryland bans it for food retailers and delivery apps from October 1, 2026, Connecticut and New Jersey bans start in 2027, and New York requires a disclosure label. The FTC targets undisclosed use under Section 5.
How does surveillance pricing work?
A seller or pricing vendor collects data about a shopper, runs it through a model that predicts willingness to pay or likelihood to buy, and adjusts the price or promotion shown. The FTC found vendors offering these tools to at least 250 retail clients.
Is surveillance pricing real?
Yes. The FTC's 2024 study documented companies selling tools built to personalize prices with consumer data, and three states have passed bans. How often individual retailers use personal data to set prices is less clear, which is why the FTC sent new orders to nine large companies in October 2026.
How can I avoid surveillance pricing?
Compare prices logged out or on another device, look for New York's algorithmic pricing label, opt out of data sale and sharing where state privacy law allows, think twice before trading data for loyalty discounts, and report suspected deceptive pricing to the FTC or your state attorney general.
Sources
- FTC: Issues orders to eight companies seeking information on surveillance pricing (July 23, 2024)
- FTC: Surveillance pricing study indicates wide range of personal data used (Jan. 17, 2025)
- FTC staff research summaries, surveillance pricing 6(b) study
- FTC: Launches personalized pricing and compensation inquiry (Oct. 2026)
- Sidley Austin: From disclosures to prohibitions, state personalized pricing laws (Oct. 26, 2026)
- Clark Hill: New York enacts algorithmic pricing disclosure requirements (June 11, 2025)
- Bloomberg Government: NY algorithmic pricing law case draws Second Circuit scrutiny
- Clark Hill: NY Algorithmic Pricing Act withstands First Amendment challenge (Oct. 13, 2025)
- Consumer Reports: New report exposes Instacart's hidden price games (Dec. 2025)
This page is journalism and commentary, not legal advice. AI law changes quickly; check the primary sources above and consult qualified counsel for your situation.