New Jersey has passed legislation that prohibits retailers from using artificial intelligence and personal data to set individualized prices for groceries and other everyday essentials. Signed by Governor Mikie Sherrill, the law seeks to prevent businesses from quietly charging some customers more than others for identical products based on data such as browsing habits, location, or purchasing history.
The Fair Price Protection Act targets so-called "surveillance pricing," where algorithms analyze shoppers’ willingness or ability to pay and adjust prices accordingly. This practice raises concerns about fairness and privacy, as two consumers shopping side-by-side might see different prices for the same item without any transparent rationale related to supply or demand.
The law, championed by state legislators including Senators Joe Cryan and Joe Lagana, along with Assembly members Rosaura Bagolie, Annette Quijano, and Chigozie Onyema, follows similar moves by Maryland and Connecticut. By enacting this measure, New Jersey becomes the third state to restrict algorithmic price discrimination on essential goods. Meanwhile, other states such as California, New York, Massachusetts, and Illinois are considering comparable legislation.
Advocates warn that surveillance pricing disproportionately impacts low-income households and communities of color, who are already more vulnerable to economic pressures. Damon King, from the New Jersey Institute for Social Justice, highlighted the risk that such pricing practices could worsen financial strain on these groups by silently inflating costs where people can least afford it.
Critics of the law, including Michele Siekerka of the New Jersey Business and Industry Association, argue that it could undermine popular cost-saving tools such as coupons, loyalty rewards, and customer-specific discounts. However, the new law explicitly allows these traditional pricing incentives to continue, focusing solely on banning discriminatory pricing driven by AI-based profiling and surveillance-style data mining.
With growing concerns nationwide over the use of AI in commerce, New Jersey’s legislation represents a significant step toward protecting consumer rights, ensuring pricing transparency, and safeguarding shopper privacy against sophisticated data-driven pricing models.