Report from NJ.Com
In Brief – New Jersey Gov. Mikie Sherrill (D) has signed the Fair Price Protection Act, banning grocery stores and third-party grocery delivery platforms from using consumers’ personal data to set or vary food prices. Sherrill said the measure will prevent companies from secretly charging some shoppers more than others for identical groceries. The law’s backers say the measure does not prohibit traditional discounts, such as retailer loyalty programs, promotional pricing, or discounts for groups such as seniors, veterans and teachers, but business groups argue that the measure will discourage many practices businesses use to offer lower price deals to consumers. The law also imposes a one-year moratorium on new electronic shelf labels in stores, a priority of grocery worker labor unions that has been rejected in other states this year.
Context – For years, progressive tech industry detractors have criticized pricing practices that have been a feature of ecommerce for decades. Every day, on almost every website, people sometimes get lower price offers, and sometimes higher ones. Shockingly, consumers like lower price offers. Businesses, on the other hand, benefit from the efficiency gains from tweaking prices up and down based on any number of factors to maximize revenue and clear inventory. Think of airline tickets. The recent flood of state legislation is largely based on claims that AI will supercharge the practice, especially by bringing personalized prices into physical stores. That’s a hypothetical scenario that is basically AI science fiction. There are no reports of any stores using surveillance, data and AI to apply in-store personalized pricing and there are many real-world barriers. However, regulating the use of data for online pricing is a major change in the ecommerce ecosystem, and grocery items are the first instance, with New Jersey following Maryland and Connecticut. New York’s legislature has sent a more expansive bill to their governor regulating pricing practices for all consumer businesses, online and offline, which would be far more disruptive. Colorado’s Governor vetoed a broad price regulation bill earlier this year that extended beyond the grocery industry.