Maryland Enacts First-in-the-Nation Prohibition on ‘Surveillance Pricing’

Last month, Maryland Governor Wes Moore (D) signed into law (HB 895), the Protection from Predatory Pricing Act, the first-of-its-kind ban on surveillance pricing that regulates how retailers and third-party delivery service providers use consumers’ personal data.

The new Maryland law specifically targets large food retailers—those operating locations of at least 15,000 square feet with significant grocery operations—along with third-party delivery service providers that deliver tax-exempt food directly to consumers. It bans these entities from using dynamic pricing, which is defined as “the discriminatory practice of offering or setting a personalized price for a good or service that is specific to a consumer based on the consumer’s personal data, regardless of whether the seller collected or purchased the personal data.” 

Maryland lawmakers carved out key exceptions to these surveillance pricing restrictions to allow retailers to make routine price changes. Factors excluded from the ban include supply and demand, perishability, raw material availability, geographic location and seasonality. Additional exclusions specified in the legislation include promotional offers, loyalty or reward program benefits, temporary discounts or competitive price-matching.

Dynamic pricing is a broad term that encompasses other pricing methods such as algorithmic pricing, surge pricing, and surveillance pricing. State lawmakers are attempting to define dynamic pricing to regulate its use by retailers. Maryland defines dynamic pricing as setting a price for a specific consumer based on the consumer’s personal data. While lawmakers in California and New York have considered legislation that defines dynamic pricing differently, Maryland remains the only state to have enacted an outright ban.

New York’s 2025 budget (S 3008) included a provision defining personalized algorithmic pricing as “dynamic pricing set by an algorithm that uses personal data.” A Senate proposal (S 8616), which passed to the Assembly on Wednesday, would ban personalized algorithmic pricing and surveillance pricing. Also this week, the NYC City Council announced plans to introduce measures to ban surveillance pricing and prevent dynamic pricing through restrictions on price increases more than once in 24 hours.

Alternatively, California’s effort to define dynamic pricing has taken shape across several bills. A bill introduced in the Assembly (AB 2564) this year would define surveillance pricing as offering a customized price for a good to a specific consumer based on personally identifiable information collected through electronic surveillance technology. The California Chamber of Commerce has expressed support for the goal of protecting consumers from unfair price increases; however, it has raised concerns about the bill’s scope. Specifically, the group is concerned that the bill’s language would eliminate pricing discounts for consumers. The group has also warned that the bill could create costly legal challenges for businesses.

Meanwhile, the California Senate is considering a bill (SB 295) that defines pricing algorithms more broadly as any computational process, including one derived from machine learning or artificial intelligence. During the 2025 legislative session, state lawmakers introduced AB 446, which would have prohibited surveillance pricing; however, the bill failed to pass through the Senate.

Dynamic pricing has also been an issue for California’s Attorney General. In January, Attorney General Rob Bonta (D) announced a surveillance pricing investigation into businesses' use of consumers’ personal information to set targeted prices. The press release stated that the California Department of Justice would send letters to retailers, grocery stores and hotels requesting information on how they use consumers’ shopping history, browsing data, location, demographics and other personal data to set prices.

Lastly, lawmakers in Connecticut and Colorado have taken up the issue of surveillance pricing, with legislation passing through both chambers in each state. Connecticut’s SB 4 would require businesses using automated pricing tools to clearly disclose when a price has been increased using a consumer’s personal data and would prohibit the use of electronic pricing labels that utilize personalized algorithmic pricing to raise the in-person price. Meanwhile, Colorado’s HB 1210 would broadly prohibit individualized price-setting for consumers.