New rules are intended to prevent retailers from using customers’ personal data to charge different prices for the same products.
TRENTON, N.J. — New Jersey Governor Mikie Sherrill has announced the signing of legislation designed to protect consumers from so-called surveillance pricing—the practice of using customer data, algorithms, and artificial intelligence to determine product prices based on individual shoppers.
“Join me as I sign legislation to protect shoppers from grocery surveillance pricing,” Sherrill said, emphasizing that consumers deserve fair and transparent pricing when purchasing everyday necessities.
What Is Surveillance Pricing?
Traditionally, every customer in the same store pays the same price for the same product. Under a surveillance pricingmodel, however, companies can analyze information such as a shopper’s purchase history, location, online activity, and other personal data to offer different prices to different customers.
Critics of the practice warn that two people could purchase the exact same product at the same time but pay different prices simply because the retailer has different information about each of them.
The New Law: Limiting AI-Driven Pricing
The legislation, known as the Fair Price Protection Act (A4085/S3612), prohibits the use of consumers’ personal data to determine the prices of essential grocery items and places restrictions on the use of electronic shelf labels when they could enable personalized pricing.
Supporters of the law argue that technology should not be used to estimate how much an individual customer is willing to pay and then adjust prices accordingly.
Why Does This Matter for New Jersey Residents?
Food prices have become one of the biggest concerns for many families in recent years. Supporters believe the new law will help ensure greater fairness, transparency, and consumer confidence during everyday grocery shopping.
“Customers should know that the price displayed on the shelf means the same thing for everyone,” supporters of the measure say.
Not Everyone Agrees
While consumer advocacy organizations have welcomed the legislation, some business groups argue that overly broad restrictions could affect certain discounts, loyalty programs, and other ways retailers personalize offers for customers.
Supporters respond that the law is not intended to eliminate legitimate discounts but rather to prevent companies from using private consumer data to unfairly increase prices.
New Jersey Joins a Growing National Trend
With this legislation, New Jersey joins a growing number of states seeking to regulate the use of artificial intelligence and consumer data in retail pricing.
For everyday shoppers, the message is straightforward: the price of essential groceries should not depend on how much a retailer knows about you.
Sources: Office of Governor Mikie Sherrill (nj.gov), ROI-NJ, NJBIZ, Gothamist, The Jersey Vindicator.