New York City Fights 'Predatory Corporate Tactics' With Ban on Surveillance Pricing

The New York City Council on Thursday approved landmark legislation banning businesses from using consumers’ personal data and algorithms to charge different people different prices for the same goods and services, an increasingly common—and controversial—corporate practice known as surveillance pricing.

In a t44-5 vote, city lawmakers passed Introduction 891-A, sponsored by Council Speaker Julie Menin, which prohibits businesses from using personal data—including browsing histories, shopping habits, demographics, location information, and other identifying characteristics—to determine individualized prices for consumers.

The legislation gives the city's Department of Consumer and Worker Protection (DCWP) authority to investigate complaints and impose civil penalties of up to $1,000 for each violation. Qualifying small businesses would have an opportunity to correct their violations before facing penalties.

“The City Council is putting consumers first by ending the deceptive and insidious practice of surveillance pricing,” said Menin, a Democrat. “When corporations use algorithms and personal data to charge different people different prices for the same products, it’s unethical and worsens our affordability crisis."

"We take consumer protection extremely seriously, and we will continue fighting to lower prices and stop predatory corporate tactics," she added.

New York City Mayor Zohran Mamadani, also a Democrat, supports the measure, and called surveillance pricing a way for corporations to "squeeze working people."

“New Yorkers’ personal data should never be used as a weapon against their own pocketbooks,” he said. “Our administration will continue working with the Council to protect workers, tenants, and consumers, and put an end to the scam economy.”

Mamdani has 30 days to sign the bill. If he does not, it automatically becomes law unless he vetoes it, a highly unlikely move that city council members could override with a two-thirds majority.

As the City Council explained:

Surveillance pricing is invisible to consumers, making it difficult to identify, but reports suggest the practice is occurring in a variety of industries. One investigation found that a major grocery delivery platform was engaging in algorithmic pricing experiments that resulted in individualized price differences as high as 23%. Another investigation found that the price of a television at one retailer increased from $499.99 to $599.99 when the consumer pulled into the store’s parking lot. A behavioral economist who worked for a major ride-share company revealed that the application increases prices when a consumer’s phone battery is low because they might not otherwise be able to get home if they do not accept the high offer. The Council aims to end these predatory practices and protect New York consumers with this landmark ban.

"Fair pricing visible for all to see. Today, New York City has upheld this basic principle, passing the country’s strongest municipal protections against surveillance pricing," DCWP Commissioner Samuel A. A. Levine said in a statement.

"At a moment when working families are struggling with the cost of living," he continued, "New Yorkers should not have to contend with an ever more fickle economy, in which the price of groceries, household goods, and everyday essentials depends on how much an algorithm thinks it can squeeze from their wallets."

"Surveillance pricing weaponizes our personal data against us—tracking our behavior, characteristics, location, schedules, and purchasing history to predict the most we are willing to pay, then charging accordingly," Levine said. "It’s wrong, it’s loathed by consumers, and now it’s illegal."

"In New York City, algorithms do not have the final say," he added. "People do."

New York City follows Seattle—which in September became the first US city to ban surveillance pricing—as well the states of Connecticut, Maryland, and New Jersey in outlawing the practice.

Consumer advocates hailed Thursday's vote, with Consumer Reports senior policy analyst Grace Gedye saying that “living in New York is already expensive enough. The last thing New Yorkers need is algorithms quietly hiking prices on everyday essentials."

"Nobody should pay more just because a data broker is tracking what they search for, what they hover over, or where they live,” she added. “The price you see shouldn’t be different based on who you are."

Lindsay Owens, the president and CEO of the economic justice group Groundwork Collaborative, asserted that “New Yorkers didn’t sign up to be spied on and have their own data turned against them just to pad corporations’ pockets."

"Today, the New York City Council has drawn a clear line in the sand that New Yorkers deserve a fair price, not one set by an algorithm designed to extract every last penny they’re willing to pay," she continued.

"But while the Council has moved to protect shoppers in the city, families across the Empire State, from Westchester to Buffalo to Albany, are still waiting on Governor [Kathy] Hochul to do the same," Owens added. "All New Yorkers deserve a fair price, no matter their ZIP code. Gov. Hochul can’t wait another day to sign the One Fair Price Act.”

“Living in New York is already expensive enough. The last thing New Yorkers need is algorithms quietly hiking prices on everyday essentials."

New York state lawmakers passed that bill in June. Championed by Democratic New York Attorney General Letitia James, the legislation would prohibit companies from using consumers' personal data—including browsing histories, income, and other identifying information—to set individualized prices for goods and services. It also prohibits collecting, retaining, selling, or sharing personal data to facilitate surveillance pricing.

Not everyone welcomed New York City's surveillance pricing ban. Uber spokesperson Josh Gold argued that "this law will make it harder for small restaurants with limited marketing budgets to reach customers, putting them at a disadvantage against national chains."

The surveillance pricing victory comes amid a broader campaign to restrict corporate snooping on New Yorkers, including the increasingly widespread use of facial recognition and other biometric identification technologies in retail businesses.

A separate City Council measure sponsored by Brooklyn Councilmember Shahana Hanif, a Democrat, would prohibit businesses and other public accommodations from using biometric recognition technology to identify or verify customers. It would also require notification and written consent for biometric data collection and establish protections governing the handling of that information.

The legislation would restrict Madison Square Garden’s controversial use of facial recognition technology. MSG owner James Dolan has notoriously used facial recognition to blacklist people he dislikes, including hundreds of attorneys whose law firms have sued his companies; in one particularly publicized case, a mother was denied entry to Radio City Music Hall while accompanying her daughter’s Girl Scout troop because she worked for a firm litigating against MSG.

Hanif has warned that biometric surveillance poses particular dangers to immigrant communities, whose identifying information could potentially reach federal immigration authorities amid the Trump administration's deadly crackdown.

"This bill protects everybody," Hanif said when introducing her bill, "but we know who experiences disproportionate surveillance, and our immigrant community is among them."