NYC cracks down on algorithmic price hikes with sweeping new surveillance pricing ban

New York City has approved legislation targeting businesses that use personal information to determine how much individual customers pay. The measure prohibits companies from using algorithms and consumer data to charge different prices for identical goods and services.

The City Council approved Introduction 891-A on November 12. Sponsored by Council Speaker Julie Menin, the legislation targets surveillance pricing, a practice that can make the same product cost different amounts depending on the customer. The measure ranks among the strongest restrictions on surveillance pricing in the country.

How surveillance pricing works

Surveillance pricing relies on algorithms that analyze personal information when determining what customers pay. Businesses can potentially use shopping behavior, location data, and other personal details to adjust prices for individual consumers. These systems can operate behind the scenes, leaving shoppers unaware that their personal information influences the prices they see.

Some companies use your personal data, like browsing history, to serve different prices to different costumers. It’s called surveillance pricing, and we just banned it in New York City.

This tweet will say the same thing in incognito mode, don’t worry.

— Mayor Zohran Kwame Mamdani (@NYCMayor) November 13, 2026

Several investigations have uncovered examples of this practice across different industries. One investigation found that a major grocery delivery platform conducted algorithmic pricing experiments. Those tests produced price differences of up to 23 percent for certain products.

Another investigation documented a television price increase at a retail store. The television reportedly cost $499.99 before its price climbed to $599.99 when the shopper entered the store’s parking lot.

Ride-hailing services have also faced scrutiny over personalized pricing. A behavioral economist who previously worked for a major ride-share company revealed how low phone battery levels could influence fares.

The application reportedly increased prices when a customer’s battery ran low. Its pricing system potentially exploited situations where customers had fewer alternatives for getting home.

Businesses face new restrictions

Introduction 891-A defines surveillance pricing as a pricing method determined entirely or partially by algorithms using personal data. The practice involves offering different prices to customers purchasing identical goods or services.

Menin described the Council’s approval as an important consumer protection measure against businesses exploiting personal information.

“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,” Menin said.

The legislation gives the Department of Consumer and Worker Protection authority to investigate complaints and issue fines of up to $1,000 per violation.

Each affected consumer or transaction can constitute a separate violation. That provision could increase financial penalties for businesses applying individualized pricing across large customer groups.

Small businesses also receive an opportunity to correct certain violations promptly and avoid penalties. The legislation preserves legitimate promotional offers, including loyalty rewards, student discounts, and veteran discounts.

Buy-one-get-one-free promotions also remain permissible under the restrictions. These exemptions distinguish ordinary promotional pricing from algorithms that use personal information to determine individualized prices.

The Council’s approval establishes a new restriction on how businesses can use consumer data when setting prices in New York City. It also gives local regulators an enforcement mechanism against surveillance pricing practices across the five boroughs.

Source: https://interestingengineering.com/culture/nyc-cracks-down-on-surveillance-pricing