New Yorkers are being urged to watch out for companies using algorithmic pricing without proper warning, following a new state law that took effect on November 10. Attorney General Letitia James has issued a consumer alert encouraging residents to report businesses that fail to disclose when they use algorithms to set prices based on personal information.
Algorithmic pricing means companies adjust prices automatically based on details like where you live, your income, or your shopping habits. This can mean some people pay more than others for the same product. The new law requires most businesses in New York to clearly display a message near prices stating, “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.”
However, the law excludes insurance companies, many financial services, and certain transportation or delivery services that use location data for ride pricing.
Attorney General James pointed out that consumers should know if their personal data influences the prices they see. She noted examples like hotel rooms costing more when booked from wealthier ZIP codes or prices rising when customers shop on certain apps inside stores.
If shoppers think a company is using algorithmic pricing but not showing the required notice, they can file a complaint with the Attorney General’s office. Companies that break this rule face fines of $1,000 for each violation.
James advises consumers to compare prices or discounts they find with those offered to others. If a price looks different or unique to them, it might mean their data is at work behind the scenes.
This law aims to bring more transparency to the ways businesses set prices in the digital age, helping New Yorkers keep a closer eye on how their personal information is used.