Published
August 27, 2026
Updated
August 27, 2026
Shoppers in New York started seeing a line of all-caps text next to online prices in late 2025: THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA. It is a legally required disclosure, not a glitch or a dark pattern — and what it does and does not tell you is worth understanding before you hit buy.
What the Label Actually Tells You
The disclosure means one specific thing: the seller used data about you — not just about the market — to arrive at the number on your screen. That is the practice regulators call personalized pricing, and consumer advocates call surveillance pricing.It is worth being precise about what the label does not say. It does not say you are being charged more than the person next to you. It does not tell you what the unpersonalized price would have been, and the law does not make the seller show you that comparison. A price set from your data could be a discount aimed at winning your business, or a markup aimed at what an algorithm estimates you will tolerate. The disclosure closes an information gap without closing the price gap.
The distinction that matters is between personalized pricing and ordinary dynamic pricing. Airline fares that climb as a flight fills, or rideshare fares that rise in a downpour, move with supply and demand — everyone searching at that moment sees the same number. Personalized pricing moves with who is asking. That is what triggers the label.
What New York's Law Requires
The rule lives in New York General Business Law § 349-a, the Algorithmic Pricing Disclosure Act, which took effect on November 10, 2025 and made New York the first state to regulate the practice directly.A business doing business in New York that sets a consumer price using a personalized algorithm fed by that consumer's personal data must include a clear and conspicuous disclosure with the offer, stating: "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA." The statute prescribes the wording, which is why the sentence reads identically on every site that shows it. "Personal data" is defined broadly — data that identifies or could reasonably be linked, directly or indirectly, to a specific consumer or device.
The scope has real limits. The law reaches goods and services bought for personal, family or household use, so business-to-business pricing sits outside it. Insurers and regulated financial institutions are carved out of the statute entirely. Location data used by for-hire and ride-hail vehicles solely to calculate a fare from mileage and duration is excluded from the definition of personal data. And a company may offer an existing subscriber a price below their own subscription contract without triggering the disclosure.
Enforcement runs through the New York Attorney General, who can seek injunctive relief and civil penalties of up to $1,000 per violation. That figure is per violation rather than per company, which is what gives it teeth against a site that shows an unlabeled personalized price thousands of times a day.
The office has already used it, and the sequence is the clearest illustration yet of how these laws actually bite. In December 2025, a joint investigation by Consumer Reports, the Groundwork Collaborative and More Perfect Union tested Instacart pricing with more than 400 volunteers shopping live across four cities. It reported that roughly three quarters of grocery items were offered at more than one price point, with as many as five different prices for the same item, in the same store, at the same time — a spread reaching about 23 percent.
What followed was a chain reaction rather than a lawsuit. The Federal Trade Commission opened an investigation. In January 2026, New York Attorney General Letitia James sent Instacart a letter demanding information about the pricing experiments and warning that the practice may implicate the disclosure act. Instacart said it believes it is in full compliance, and subsequently ended the pricing experiments. No finding of a violation has been made against the company, and a demand for information is not a determination that any law was broken.
Note what is absent from that chain: consumers. A report, a regulator, a second regulator, a company reversing course — and no class action anywhere in it, because the statute gives shoppers no way in.
What a "Private Right of Action" Is
This phrase decides who is allowed to do anything about a broken law, and it is the single most useful thing to understand about every statute on this page.A private right of action is a provision in a statute authorizing an ordinary person — not a prosecutor, not an agency — to file their own lawsuit to enforce it. When a law has one, a violation is a key that fits a courthouse door: you sue, you may recover damages, and if enough people were harmed the same way, those individual suits can be aggregated into a class action. When a law does not have one, the same violation is real, and illegal, and completely outside your reach. Only the named government enforcer can act on it.
Laws you have heard of sit on both sides of that line. The TCPA gives you a private right of action, which is why a single unwanted text can become a lawsuit. New York's general deceptive-practices statute, GBL § 349, has one. So does federal antitrust law. But New York's algorithmic pricing law, Maryland's grocery ban and Connecticut's retail ban all deliberately do not — enforcement in each runs through the attorney general alone.
Courts occasionally used to fill that gap by "implying" a private right where a statute was silent. Modern federal courts have largely closed off that route, treating the question as one of legislative intent: if the legislature wanted private enforcement, it would have written it in. So silence now reads as a decision, not an oversight.
And in New York's case it demonstrably was a decision. An earlier version of the algorithmic pricing bill contained a private right of action; it was removed before passage. Someone specifically took the courthouse key off the table.
So Can Anyone Sue? Can There Be a Class Action?
Yes to both — just not over the label. This is the distinction that gets lost in most coverage, so it is worth laying out cleanly.You cannot sue for a missing or wrong disclosure under § 349-a, for a personalized grocery price in Maryland after October 2026, or for a customized retail price in Connecticut after July 2027. Those are attorney general matters. There is no fund, no claim form, no class.
You may be able to sue under a different, older law that happens to cover the same conduct. That is exactly what is happening. Plaintiffs are not pleading the new pricing statutes; they are pleading wiretap and privacy statutes and general consumer-protection acts that already carry private rights of action. The complaints against JetBlue allege violations of the federal Electronic Communications Privacy Act and New York GBL §§ 349 and 396 — not the disclosure act. The suit against The Washington Post runs on the D.C. Consumer Protection Procedures Act. Both sets of allegations are unproven, neither company has been found liable, and there is nothing to claim in either.
There is a quiet irony in the Post case worth noticing: the disclosure New York's label law forced the company to make is what put the practice in front of subscribers in the first place. A statute with no private right of action generated the evidence for a lawsuit brought under a statute that has one.
The third route is the one nobody expects, and it is where the real class action money is.
The Actual Class Actions Are Antitrust Cases
When lawyers discuss "algorithmic pricing class actions," they are usually not talking about surveillance pricing at all. They mean a different theory entirely: competitors feeding their own nonpublic data into the same third-party pricing software, which then recommends prices back to all of them — parallel pricing achieved without anyone in a smoke-filled room. Federal antitrust law carries a private right of action with treble damages, so these cases can be brought, and certified, and are worth a great deal.The rental-housing version is furthest along. The Department of Justice sued RealPage over its revenue-management software and filed a proposed settlement on November 24, 2025 imposing detailed restrictions on how the company may use nonpublic competitor data — while notably not treating algorithmic pricing as illegal in itself. Private class actions have run alongside it, including the LivCor settlement OCA covered.
The hotel version just produced a split among federal appeals courts. In Gibson v. Cendyn Group, the Ninth Circuit affirmed dismissal of claims that Las Vegas Strip casino-hotels colluded through Cendyn's Rainmaker pricing software. Then on July 29, 2026, in Cornish-Adebiyi v. Caesars Entertainment, the Third Circuit revived nearly identical claims against Atlantic City casino-hotels using the same software — where guests alleged the properties fed current, nonpublic room-rate and occupancy data into Rainmaker and accepted its recommended rates roughly 90 percent of the time. These remain allegations; no defendant has been found liable.
Two circuits, one piece of software, opposite answers. That disagreement is how questions reach the Supreme Court, and it means the legal exposure for shared-algorithm pricing currently depends on which circuit you sue in. For consumers the practical takeaway is narrower but useful: if you are looking for the algorithmic-pricing case that might actually pay class members someday, look at the antitrust docket, not the disclosure statutes.
Retailers Fought the Label and Lost the First Round
The National Retail Federation sued in the Southern District of New York to block the disclosure requirement, arguing the mandated sentence is compelled speech that violates the First Amendment — that being forced to attach an ominous-sounding warning to a lawful practice is itself the injury.On October 8, 2025, the district court disagreed. It denied the trade group's request for a preliminary injunction and dismissed the case, reasoning that the disclosure is purely factual and uncontroversial, that it is not unduly burdensome, and that consumers would otherwise have no way of knowing their own data set the price. The NRF appealed to the Second Circuit, where the New York Attorney General urged affirmance in February 2026 and outside groups filed briefs on both sides. As of publication, the appeal has not been decided.
The industry's policy objection is worth stating fairly: retail groups argue the label sweeps in ordinary personalization — loyalty offers, targeted coupons, discounts based on what you bought before — and makes routine marketing look sinister to shoppers who cannot tell the difference. That argument has not carried the day in court so far, but it is shaping the next round of legislation.
New York May Ban the Practice Outright
Disclosure was never meant to be the end state. On June 5, 2026, the New York Legislature passed the One Fair Price Act (S8623), which would prohibit businesses from using personal data to set individualized prices at all, rather than merely labeling them. As passed, the bill also reaches the data supply chain, barring the disclosure of personal data for the purpose of facilitating surveillance pricing — an approach that would put third-party data brokers in scope alongside the retailer.The penalties step up sharply from the disclosure law: reported figures are up to $5,000 for a first violation and up to $20,000 for subsequent ones, or disgorgement of profits, whichever is greater. Legal analyses of the bill also describe a private right of action for injured consumers — the enforcement route § 349-a lacks. The carve-outs answer the industry's complaint directly, exempting loyalty and rewards programs, military and senior discounts, promotional pricing, and discounts based solely on a customer's own prior purchases.
None of it is law yet. Governor Kathy Hochul has until December 31, 2026 to sign or veto, and in mid-August 2026 a coalition of business groups wrote asking her to amend the bill first — chiefly to draw a sharper line between dynamic and surveillance pricing and to widen the discount-program exemption. Chapter amendments negotiated before signature are common in Albany, so the version that becomes law, if one does, may not be the version that passed.
Where the Rest of the Country Stands
New York is early but no longer alone, and the two states that have actually banned the practice took opposite approaches to scope.Maryland went first and narrow. The Protection From Predatory Pricing Act (HB 895), signed April 28, 2026 and effective October 1, 2026, bars grocery sellers of at least 15,000 square feet and grocery delivery services from using personal data to set higher food prices. Penalties reach $10,000 per violation and $25,000 for repeat violators, with a 45-day cure period — but loyalty and subscription pricing is exempt, a carve-out privacy analysts have called a loophole given that loyalty programs are how grocers collect the data in the first place.
Connecticut went second and wide. HB 5563, signed June 4, 2026 and effective July 1, 2027, bars retailers generally and third-party delivery services from setting customized prices from personal data, enforced by the attorney general under the state's unfair trade practices act. It also adds a disclosure of its own, and a blunter one than New York's: "THIS PRICE WAS INCREASED BY A PRICE SETTING DEVICE USING YOUR PERSONAL DATA." New York's label is neutral about direction; Connecticut's asserts the outcome. Dozens of similar bills have been introduced in other states.
Federal regulators are moving with the narrower tool Congress has given them. On August 19, 2026, the Federal Trade Commission issued a proposed Enforcement Policy Statement on Personalized Pricing for public comment, taking the position that using consumers' personal data to set individualized prices without adequate disclosure can be deceptive or unfair under Section 5 of the FTC Act. The Commission was explicit that it has no authority to ban the practice outright — only to police how it is done and how it is disclosed. The proposal landed about two weeks after a Senate Judiciary Committee hearing on the same subject.
For a consumer, the practical upshot of that patchwork is simple: whether you see the label at all depends on where you are shopping from, and whether the practice behind it is legal depends on the state and, soon, the product category.
What to Do When You See It
The disclosure is only useful if you act on it, and the useful action is comparison, not outrage.• Check the same item logged out, in a private window, or on another device before buying.
• Compare at a competitor — a personalized price is an estimate of your willingness to pay, and the cheapest way to falsify that estimate is to leave.
• Screenshot the price, the date and the disclosure if something looks wrong. That record is what a state attorney general's consumer complaint process can use.
• Read the label as information, not as an accusation. Its absence on a site that is clearly personalizing is the more interesting fact.
It is also worth keeping personalized pricing separate in your head from the pricing tactics that have drawn most of the class action litigation to date — drip pricing and phantom sales, where the number moves at checkout or the "was" price was never real, and the interface tricks catalogued as dark patterns. Those are about how a price is presented to everyone. Surveillance pricing is about a number built for you alone, which is exactly why regulators concluded shoppers would never spot it without being told.
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Frequently Asked Questions
Does the label mean I am being overcharged?
Not necessarily. The disclosure says only that your personal data was used to set the price you are seeing. It does not say whether that price is higher or lower than what someone else would be shown, and the law does not require the seller to reveal the comparison. A personalized price can be a discount as easily as a markup.
Can I sue a store for showing me a personalized price?
Not under New York's disclosure law itself. General Business Law § 349-a is enforced by the New York Attorney General, who can seek injunctive relief and civil penalties of up to $1,000 per violation. An earlier version of the bill included a private right of action, but that provision was removed before passage. Separate lawsuits over data-driven pricing are being brought under other theories, such as wiretapping and deceptive practices statutes, and those remain unproven allegations.
What is a private right of action?
It is a provision in a statute that authorizes an ordinary person, rather than a government agency, to file their own lawsuit to enforce that law. When a statute has one, individual suits are possible and can be aggregated into a class action. When it does not, only the named government enforcer can act, and a violation gives a consumer no way into court. New York's algorithmic pricing law, Maryland's grocery ban and Connecticut's retail ban all lack one; enforcement in each runs through the attorney general alone.
Is there a class action I can join over surveillance pricing?
Not under the disclosure and ban statutes, which give consumers no private right of action. Class actions over data-driven pricing are being filed under older laws that do allow private suits, such as the federal Electronic Communications Privacy Act and state consumer protection acts, including complaints against JetBlue and The Washington Post. Those allegations are unproven and there is nothing to claim in either. Separately, antitrust class actions over shared pricing software, such as the RealPage rental cases and the Cendyn hotel cases, proceed under federal antitrust law, which does carry a private right of action.
Why do I see the label on some sites and not others?
The requirement applies to businesses doing business in New York that set consumer prices using algorithms fed by that consumer's own personal data. A seller that charges everyone the same price, or that varies prices by supply and demand rather than by individual data, is not covered. The statute also exempts insurers and regulated financial institutions, excludes location data used by for-hire and ride-hail vehicles to calculate mileage and duration fares, and permits a discount offered to an existing subscriber below their own contract price.
Is personalized pricing itself illegal?
In New York it is currently disclosed rather than banned. The Legislature passed the One Fair Price Act on June 5, 2026, which would prohibit the practice outright, but as of publication it has not been signed and the governor has until December 31, 2026 to act. Maryland and Connecticut have enacted narrower bans that are not yet in force. Charging different prices based on protected characteristics such as race or sex can raise separate civil rights issues regardless of these laws.
What data goes into a personalized price?
The Federal Trade Commission has described personalized pricing as the use of consumer data such as browsing history, location data, demographic information or purchasing patterns to set a price based on an estimate of what an individual is willing to pay or how likely they are to comparison shop. New York's statute defines personal data broadly as data that identifies or could reasonably be linked to a specific consumer or device.
What should I do when I see the disclosure?
Treat it as a signal to check the price somewhere else before buying. Comparing the same item in a logged-out browser, on a different device, or at a competitor costs nothing and is the only practical way to see whether the personalized price is competitive. Screenshots that capture the price, the date and the disclosure are also worth keeping if you later want to report the seller to a state attorney general.
Sources
• New York Attorney General — Consumer Alert on algorithmic pricing as the new law takes effect (Nov. 5, 2025)• New York General Business Law § 349-a (Algorithmic Pricing Disclosure Act), effective Nov. 10, 2025.
• Court records — National Retail Federation v. James (S.D.N.Y., dismissed Oct. 8, 2025; appeal pending, 2d Cir.).
• New York Senate Bill S8623 (One Fair Price Act), passed by both chambers June 5, 2026.
• New York Attorney General — Demand for answers from Instacart about algorithmic pricing (Jan. 8, 2026)
• FTC — Commission seeks comment on Enforcement Policy Statement regarding personalized pricing (Aug. 19, 2026)
• FTC — Proposed Enforcement Policy Statement Regarding Personalized Pricing
• Stateline — States begin banning surveillance pricing (Aug. 4, 2026)
• Court records — Cornish-Adebiyi v. Caesars Entertainment (3d Cir., decided July 29, 2026) and Gibson v. Cendyn Group, LLC (9th Cir.).
• U.S. Department of Justice, Antitrust Division — proposed RealPage settlement filed Nov. 24, 2025
• Consumer Reports, Groundwork Collaborative & More Perfect Union — Instacart pricing investigation (Dec. 2025)
• Maryland General Assembly — House Bill 895 (enrolled text)
• Connecticut HB 5563 — bill text and history
• Skadden — Maryland becomes the first state to restrict surveillance pricing
• NY1 — NYC businesses urge Hochul to back changes to the surveillance pricing bill (Aug. 12, 2026)
About This Page
OpenClassActions.com is a consumer news and information site, not a law firm. This page is general information about consumer pricing laws and pending legislation, not legal advice, and it does not create an attorney-client relationship. Laws described here are current as of the publication date and several are pending or not yet in force; check the official source before relying on any of it.
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