Lawmakers Aim to Ban ‘Surveillance Pricing’ After Instacart Backlash
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The popular retail and grocery delivery app Instacart has faced criticism after it was revealed it used consumer data to charge varying prices for the same items. Now, New York state Attorney General Letitia James and lawmakers are seeking to ban this practice, known as “surveillance pricing,” through a package of proposed bills. The bills would, among other things, bar the use of personal data in pricing algorithms and prevent physical stores from adjusting digital price tags after a customer picks up an item.
Instacart, a renowned grocery delivery app, recently faced critique for secretly using customer data to impose different charges for the same items. The incident triggered a call for action from Attorney General Letitia James and top Democratic lawmakers to combat such companies using algorithms and personal data for setting individualized prices under a practice termed “surveillance pricing.”
A previous investigation reported shoppers on different Instacart accounts being charged varied amounts for identical items, with some shoppers paying up to 23% more. This could mean over $1,200 in extra costs annually, especially for a family of four,” stated Elizabeth Pancotti of Groundwork Collective.
James and top New York lawmakers are now looking to outlaw such practices through proposed bills. This controversial tactic, known as “surveillance pricing”, differs from “dynamic pricing” as used by Uber. The planned legislation primarily targets surveillance pricing, according to James’ office.
One proposed bill demands algorithm transparency and clear price-setting disclosure, while another prohibits physical stores from using digital price tags that can alter between the time a product is picked up to when it’s purchased. Opponents, however, argue such legislation might eliminate “smart” pricing deals, impacting New Yorkers negatively.
“Smarter pricing tools like targeted coupons and loyalty rewards help families afford basic needs. Proposals like this endanger these tools,” stated tech policy group Chamber of Progress.
Labor unions are supporting the proposed legislation, advocating that it safeguards the jobs of grocery store workers.
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