New Jersey lawmakers are considering legislation that would prohibit supermarkets and other food retailers from using artificial intelligence, algorithms, and electronic surveillance to charge different grocery prices to different shoppers.
The Fair Price Protection Act (S-3612/S-3717) is headed to NJ Gov. Mikie Sherrill, who is expected to sign the bipartisan legislation into law. The bill prohibits certain businesses from using dynamic, surveillance, or personalized algorithmic pricing when selling groceries to consumers.
The proposed law aims to prevent what lawmakers call “personalized algorithmic pricing” and “surveillance pricing,” emerging practices that use consumer data to determine how much an individual customer pays for groceries. Supporters say the measure would help ensure shoppers pay the same price for the same products, regardless of information collected about them.
It significantly expands the scope of New Jersey’s consumer protections by explicitly classifying individualized digital price manipulation as an unlawful practice under the state’s existing Consumer Fraud Act (CFA).
If signed into law by Sherrill, New Jersey will be the third state to enact a law curbing surveillance pricing, joining Maryland and Connecticut. The New York legislature has also sent a surveillance pricing ban to Gov. Kathy Hochul’s desk for signature.
What is Dynamic Pricing
Under the bill, retailers would be prohibited from using dynamic pricing systems that rely on artificial intelligence or algorithms that continuously update prices in near real time based on changing data. The legislation makes clear that it would not affect traditional grocery promotions, including weekly sales, digital coupons, loyalty rewards, clearance pricing, or other temporary discounts available to customers.
The bill covers virtually every category of grocery and household staple sold in retail food stores, including meat, seafood, dairy products, produce, beverages, baked goods, snacks, frozen foods, paper products, household cleaning supplies, health and beauty products, pet food and other everyday essentials.
Surveillance and Personalized Algorithmic Pricing
The legislation also targets personalized algorithmic pricing, a practice in which algorithms analyze consumer information to determine different prices for individual shoppers or groups. According to the bill, the pricing system would be prohibited from using consumer data that identifies, or can reasonably be linked to, a specific person or that person’s electronic device to create individualized prices.
This business strategy, also known as surveillance pricing, tailors costs based on personal variables such as search history, device type, location, and purchase history. Information is gathered through technologies such as cameras, sensors, device tracking, biometric monitoring, and other electronic surveillance tools to tailor prices based on a customer’s behavior, characteristics, or other personal information.
What is Means
The legislation applies to retail food stores that regularly sell groceries and household food products for customers to purchase and consume off the premises.
If approved, New Jersey would join a growing national debate over the use of artificial intelligence in retail pricing. Consumer advocates have raised concerns that AI-powered pricing systems could allow retailers to charge higher prices based on what algorithms predict an individual shopper is willing to pay, while retailers argue data-driven technology can improve inventory management, reduce food waste, and provide more targeted promotions.
The bill seeks to draw a clear distinction between personalized pricing based on consumer data and traditional sales that are available to all shoppers. If the governor signs the bill, enforcement would fall under New Jersey’s Consumer Fraud Act.
A first violation could result in a fine of up to $10,000, with subsequent offenses up to $20,000. Businesses could also face remedies such as cease-and-desist orders, punitive damages, and treble damages for affected consumers.
The bipartisan legislation was sponsored by state Sen. Joe Cryan (D-20) and Rep. Chigozie Onyema (D-28). Cosponsors were state Sen. Joe Lagana (D-38) and Rep. Rosaura Bagolie (D-27) and Annette Quijano (D-20).
Why it Matters
Most major supermarket chains already use digital loyalty programs and electronic shelf labels. While those technologies are not prohibited under this bill, lawmakers want to prevent their use with artificial intelligence or customer surveillance to charge different prices to different shoppers for the same grocery item.
If enacted, the measure could affect how grocery stores throughout New Jersey, including those serving the Meadowlands region, use AI and customer data in the future.
