New Jersey Becomes Latest State to Pass Law Against Surveillance Pricing

New Jersey has passed the Fair Price Protection Act, which bans the use of AI or algorithms to adjust grocery prices based on individual data. The law targets "surveillance pricing," a practice where retailers use personal information to set different prices for different customers. The legislation was signed into law by the governor after clearing the state legislature. It makes New Jersey the latest state to enact such a restriction.

The Fair Price Protection Act specifically prohibits the use of artificial intelligence and machine learning algorithms to analyze consumer personal data for the purpose of setting individualized grocery prices. The law defines personal data broadly, including location information, browsing history, purchase history, and demographic data. The law applies to both online and in-store grocery retailers. Retailers found in violation may face fines or other enforcement actions. The bill was supported by consumer advocacy groups who argued that surveillance pricing leads to unfair and discriminatory outcomes.

New Jersey joins a growing number of states that have passed similar measures, reflecting increasing bipartisan concern over the use of AI in pricing. The law is part of a larger movement towards state-level AI regulation in areas such as hiring, credit, and now retail pricing. It is expected to take effect in 2027, giving retailers time to comply. The law has been praised by privacy advocates and criticized by some business groups who argue it stifles innovation.