Key Points:

• State policymakers propose consumer protections for AI-powered personalized pricing

• Legislators in over a dozen states introduce bills to ban dynamic pricing

• Lawmakers are considering both bans and disclosure requirements for algorithmic pricing

State policymakers are scrambling to establish consumer protections as retailers increasingly use artificial intelligence-powered personalized pricing.

Legislators in more than a dozen states have proposed or introduced bills on the issue, concerned that customers are being unfairly targeted with increased costs for products.

In Maryland this week, Democratic Gov. Wes Moore — flanked by House Speaker Joseline Peña-Melnyk and Senate President Bill Ferguson — announced that one of his legislative priorities for the year is banning “dynamic pricing” in grocery stores. 

“This is not innovation, this is exploitation,” Moore said at a grocery store near Annapolis that doesn’t use dynamic pricing. “This is not a fair market, this is a stacked deck. This is about profit.”

So-called surveillance pricing is made possible by companies’ ability to collect reams of data about individual consumers, whether they’re shopping online or in a brick and mortar store. 

Maryland’s Protection from Predatory Pricing Act, which hasn’t been filed yet, would bar grocery stores from using electronic shelf labels to adjust prices in real time. It would also prohibit stores from using “surveillance data” to set individualized prices as a person peruses the aisles, according to an announcement from Moore’s office.

Stores would have to set prices and leave them for at least one day. Repeat violations would bring fines of up to $25,000.

Read more: Md. data privacy legislation provides new model

Automated price-setting bills have been introduced for 2026 in several other states, including Arizona, Florida, Hawaii, Illinois, Kentucky, Nebraska, Oklahoma, Pennsylvania, Tennessee, Vermont, Virginia and Washington. Banning “surveillance pricing” is also a priority for Colorado Democrats. 

New York lawmakers have filed more than a half dozen bills on the topic, including a measure that would bar online retailers from setting prices based on factors such as a person’s location; a bill that would ban electronic shelving labels in food and drug stores; and legislation to institute a broad ban on personalized algorithmic pricing.

A 2025 New York law already requires disclosure when businesses use algorithms and personal data to set prices, although it faces a legal challenge.

A handful of Massachusetts pricing bills carried over from last year, including one that would ban grocery stores from using biometric data to set prices. A similar measure is also still alive in California.

Another Maryland bill, from Democratic Del. Joe Vogel, would target both “surveillance-based” pricing and wage setting — defined as customized prices or wages set via an automated decision system based on data collected about individuals or groups of individuals.  

In a November post on X, Vogel said the legislation is the “type of consumer and worker protection” that could run afoul of President Donald Trump’s executive order targeting state-level artificial intelligence regulation. 

Lawmakers are generally taking one of two approaches to personalized algorithmic pricing: seeking to outlaw it or requiring disclosure to consumers. 

“In introducing legislation, lawmakers are trying to strike a balance by prohibiting clearly harmful scenarios like price gouging or exploitation, while not also preventing companies from offering loyalty programs, personalized discounts, or other things consumers enjoy,” said Jameson Spivack, deputy director for AI at the Future of Privacy Forum, who tracks algorithmic pricing legislation.

A separate category of bills that began trending last year targeted rent-setting algorithms. Only one in New York was signed into law; a Colorado bill was vetoed. Some bills have carried over, while fresh legislation has been introduced this year in Arizona, New Hampshire, New Jersey, Rhode Island and Virginia.

Read more: Dems seek statewide bans on rent-setting algorithms

Connecticut Democrats have announced plans to introduce a bill that would ban the use of facial recognition technology in retail stores. The proposal follows reports of a prominent grocery store chain deploying the technology to identify known shoplifters. 

“Nobody signed up for a facial scan when they go to buy milk and eggs at the store,” Connecticut Senate Majority Leader Bob Duff, a Democrat, told News 12, adding that facial recognition could also be used for personalized pricing.  

The sponsors of price-setting bills are predominantly Democrats, signaling potential partisan tension over how to regulate the way companies establish prices. 

The Federal Trade Commission under former President Joe Biden issued a report last January that found people’s geolocation data and browser history is often used to set different prices for different consumers. An example might be that a new parent sees higher prices for baby thermometers. 

“Initial staff findings show that retailers frequently use people’s personal information to set targeted, tailored prices for goods and services — from a person’s location and demographics, down to their mouse movements on a webpage,” then-FTC Chair Lina Khan said at the time.

Companies including Delta Airlines have pushed back on the suggestion that they are using AI to extract the highest prices out of customers. In a July 2025 letter to members of Congress, Delta said its dynamic pricing model is based on “aggregated data” that can result in both higher or lower prices based on market dynamics.

“To reiterate, prices are not targeted to individual consumers,” the letter said. 

The tech industry has opposed efforts to ban or restrict algorithmic pricing. In a letter to New York lawmakers last year, the Chamber of Progress wrote that algorithms play a role in “driving prices down for consumers” and allow for a “more dynamic and responsive marketplace.”