BILL NUMBER: S8623B
SPONSOR: MAY
 
TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting the
use of surveillance pricing
 
PURPOSE OR GENERAL IDEA OF BILL:
To protect consumers from discriminatory, opaque, and exploitative pric-
ing practices driven by algorithmic systems that rely on personal data.
The bill prohibits surveillance pricing, regulates the use of certain
dynamic pricing systems, establishes disclosure requirements for certain
pricing practices, and creates enforcement mechanisms to protect consum-
ers from unfair and deceptive conduct.
 
SUMMARY OF PROVISIONS:
Section one amends section 349-a of the general business law to estab-
lish updated definitions for key terms, including algorithm, consumer,
dynamic pricing, surveillance pricing, bona fide discounts, consumer
price, online marketplace, and service provider. The bill prohibits
entities and service providers from using surveillance pricing to set or
adjust the price of goods or services based on consumers' personal data
and prohibits the use, sale, retention, or disclosure of personal data
for the purpose of facilitating surveillance pricing.
The section permits bona fide custom discounts in limited circumstances,
including certain loyalty, rewards, membership, and class-based discount
programs, provided such discounts are offered uniformly to consumers who
meet clearly disclosed eligibility criteria. The bill also requires
disclosure when dynamic pricing systems adjust prices more than once in
a twenty-four hour period, including disclosure of the use of dynamic
pricing, the frequency of price changes, and the conditions that influ-
ence such pricing.
The section includes exceptions for certain regulated financial insti-
tutions, pricing expressly required or authorized by law, and other
lawful pricing practices that do not constitute surveillance pricing.
Enforcement authority is provided to the Attorney General and certain
local government enforcement officials. Violations are subject to reme-
dies and penalties under section 349 of the general business law, along
with supplemental civil penalties and other available remedies. The bill
also authorizes the Attorney General to promulgate rules and regulations
necessary to implement and enforce the section and clarifies that the
remedies provided are cumulative.
Section two establishes severability provisions.
Section three provides that the act shall take effect one hundred eighty
days after it becomes law and authorizes the adoption of any necessary
rules or regulations prior to the effective date.
 
JUSTIFICATION:
As pricing algorithms become increasingly sophisticated, many companies
now use personal data such as browsing history, geolocation, purchase
behavior, and online activity to set individualized prices. This prac-
tice, often referred to as personalized algorithmic pricing or surveil-
lance pricing, allows businesses to charge different consumers different
prices for the same good or service based on personal characteristics
rather than market conditions.
These practices typically occur without meaningful consumer awareness or
consent, resulting in hidden discrimination, economic harm, erosion of
consumer trust, and invasive data practices. A recent Consumer Reports
study released this week found that Instacart's AI-enabled pricing prac-
tices inflated grocery bills by as much as twenty-three percent. In
early 2025, the Federal Trade Commission released a report detailing how
companies use personal data, including location and browser history, to
set individualized prices, confirming that consumers may be charged
different prices for the same product based on such data. Over the past
decade, companies including Staples and The Princeton Review were found
to vary prices by zip code, with patterns raising concerns about racial
and ethnic discrimination.
New York consumers are entitled to transparent and fair pricing. By
prohibiting the use of personal data for individualized pricing and
regulating opaque surveillance pricing practices, this bill restores
consumer autonomy, promotes fairness, and prevents exploitative data-
driven pricing practices.
 
PRIOR LEGISLATIVE HISTORY:
Section 349-a of the general business law was originally enacted in Part
X of Chapter 58 of the Laws of 2025. This bill strengthens and clarifies
that framework by refining definitions, regulating surveillance pricing
practices, and enhancing enforcement tools.
 
FISCAL IMPLICATIONS:
Minimal. Any enforcement costs incurred by the state may be partially
offset by civil penalties directed toward consumer protection and data
privacy enforcement.
 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.

Statutes affected:
S8623: 349-a general business law
S8623A: 349-a general business law
S8623B: 349-a general business law