Maryland Becomes First State To Ban Surveillance Pricing in Grocery Stores

Maryland has become the first state in the nation to outlaw “surveillance pricing” in grocery stores, with its Protection from Predatory Pricing Act taking effect on October 1. The law prohibits grocery stores and third-party delivery services from using real-time, data-driven pricing models that adjust item costs based on demand, weather, time of day, or personal shopper data — including income. Retailers must now keep prices fixed for at least one business day.Governor Wes Moore championed the bill as a safeguard against emerging pricing technology. “At a time when Marylanders are already stretched by the rising cost of groceries, housing, and everyday necessities, we must ensure that new technologies are not used to drive up the bill for working families,” Mr. Moore said.The legislation follows growing industry use of electronic shelf labels, which allow retailers to change prices instantly. Walmart has installed the labels in 2,300 stores, though CEO John Furner insists the technology isn’t used to personalize costs. “We don’t set different prices based on who you are or the time of day, and we won’t,” Mr. Furner said.Consumer Reports, which lobbied heavily for the bill, says the concerns are well-founded. The organization’s investigation into Instacart found that nearly 400 shoppers buying identical baskets at the same time paid different prices — with discrepancies as high as 23 percent, potentially costing a family over $1,200 annually. A separate probe into Kroger revealed the company had compiled a 62-page customer data profile, much of it inaccurate.“Surveillance pricing can drive up the price of food. … Surveillance pricing allows companies to take advantage of that information asymmetry and charge you as much as they think you’re individually willing to pay,” said a senior policy analyst at Consumer Reports, Grace Gedye.While welcoming Maryland’s new law, Ms. Gedye said it was weakened by exemptions for loyalty programs and subscriptions and a provision that only the state attorney general — not individual consumers — can sue for violations. “This bill has loopholes that will limit its real-world impact. We urge other state legislatures considering personalized pricing legislation to build in stronger consumer protections,” she said.Other states have addressed the issue in other ways. California has banned pricing algorithms that pull from competitor data, while New York now requires businesses to disclose when personal data is used to set prices. Dozens of other states are reviewing similar legislation.The scrutiny extends to Capitol Hill. Senators Elizabeth Warren of Massachusetts and Bob Casey of Pennsylvania, both Democrats, recently sent a letter to Kroger’s CEO, Rodney McMullen, questioning the company’s AI-powered “dynamic pricing” partnership with Microsoft, which uses digital shelf labels and facial recognition to tailor prices to individual shoppers.“EDGE will allow Kroger to use customer data to build personalized profiles of each customer … a corporate profiteering capability that would be impossible using a mere paper price tag,” the senators wrote.A Kroger spokesman pushed back, stating the company’s goal is “to lower prices over time so that more customers shop with us,” adding that any shelf-tag testing is meant to benefit consumers, not exploit them.

Maryland Becomes First State To Ban Surveillance Pricing in Grocery Stores

Maryland Becomes First State To Ban Surveillance Pricing in Grocery Stores

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