TRENTON – Acting to protect consumers from the predatory use of surveillance pricing, the Senate today approved legislation sponsored by Senator Joe Cryan and Senator Joe Lagana that would prohibit the use of technology-cultivated personal data from consumers to set individual prices for grocery purchases and other food products.

The bill, S-3612/S-3717, entitled the “Fair Price Protection Act,” would ban surveillance pricing, where the shopping habits, online activity and other behavioral information are collected and used to charge different people different prices for the same food items. The bill would protect consumers from being charged higher prices based on their preferences and characteristics, said Senator Cryan.

“Surveillance pricing is an abuse of modern technology where artificial intelligence is used to set different prices for different customers,” said Senator Cryan (D-Union). “Consumers are being hurt at a time when families are already struggling to pay their bills. They should be protected from the intrusive use of algorithms, personal data and other technologies to exploit their food purchases or individual characteristics.”

The legislation would prevent businesses from using surveillance pricing, or using personal information collected through electronic surveillance, or any pricing strategy that determines the price of essential food products based on a consumer’s personal data, including biometric monitoring, genetic information, or protected class data, to increase the price of a food item for an individual based on collected data.

The prohibitions would also apply to third-party grocery delivery platforms.

“Surveillance pricing isn’t innovation at its finest, but a modern form of consumer fraud that quietly manipulates prices based on a customer’s private online behavior,” said Senator Lagana (D-Bergen). “At a time when families are already struggling with the rising cost of basic necessities, the Fair Price Protection Act will put a stop to these deceptive practices and ensure businesses treat shoppers equally, without weaponizing their own personal data against them.”

The bill would not prevent food stores from providing consumers with discounts from a promotional price, for broadly defined groups such as teachers, veterans or senior citizens, or for loyalty programs. Businesses would be required to disclose to consumers the terms and conditions of the loyalty programs, allowing them to opt-in for personalized discounts.

The bill also establishes a one-year moratorium on the installation of new electronic shelving labels (ESLs), which are used to connect to surveillance pricing technologies. Businesses that already use them would be allowed to continue their use. A study on the impact of ESLs would then be conducted to determine their impact on surveillance pricing and if they are in compliance with the Consumer Fraud Act.

The legislation, which would take effect one year after enactment, was approved by the Senate with a vote of 22-14.