New Jersey retailers will no longer be allowed to mine a shopper’s personal data to calculate how much that individual might be willing to pay for groceries and other necessities under a new law signed today by Gov. Mikie Sherrill.
The Fair Price Protection Act prohibits businesses from using information such as a customer’s online activity, location and purchasing history to charge different people different prices for identical products.
“New Jersey families are already feeling the pressure of higher costs,” Sherrill said. “The last thing they need is companies secretly using their personal data to charge them more than someone else for the exact same product.”
The practice, known as surveillance pricing, uses artificial intelligence and large-scale data collection to generate individualized prices based on a shopper’s habits or personal characteristics, often without the consumer’s knowledge.
The law applies to groceries and other household necessities but does not prohibit loyalty programs or customer discounts. It also imposes a one-year moratorium on the new use of electronic shelf labels while the New Jersey Innovation Authority studies the technology’s potential impact. Stores may continue using, repairing, and replacing electronic shelf labels already in place.
“Surveillance pricing is an abuse of modern technology where artificial intelligence is used to set different prices for different customers,” said one of the bill’s sponsors, State Sen. Joe Cryan (D-Union). “Consumers are being hurt at a time when families are already struggling to pay their bills.”
Cryan said shoppers should be protected from the use of algorithms and personal data to exploit their purchasing habits or individual characteristics.
“Consumers should not have to wonder whether the price they see is the same price someone else is paying for the exact same product,” said Assemblyman Onyema (D-Newark). “Fairness, transparency, and privacy should not disappear simply because a transaction happens online or through an app.”
Attorney General Jennifer Davenport said her office would enforce the new protections, arguing that grocery prices should be determined by a product’s cost, not by invasive data collection designed to predict what a shopper will tolerate.
The United Food and Commercial Workers union praised both the pricing protections and the moratorium on new electronic shelf labels, which have been rapidly adopted by some large grocery chains.
“By signing the Fair Price Protection Act into law, Governor Sherrill has declared that surveillance pricing has no place in New Jersey,” said UFCW International Vice President Ademola Oyefeso. “We hope this law will serve as a catalyst for states across the country to shield shoppers from AI-driven predatory pricing and protect good, union grocery jobs.”
Assemblywoman Rosy Bagolie (D-Livingston) said that the new law “draws a clear line between legitimate business practices and the misuse of personal data.”
“New Jerseyans should be able to shop without feeling like every click, search, or purchase is being monitored and monetized,” she said.
New Jersey Working Families Party State Director Antoinette Miles said corporations had turned grocery shopping into “a surveillance operation” by tracking what consumers buy, where they live and where they shop.
“Surveillance pricing is why corporations keep making record-breaking profits while working families feel broke,” Miles said. “This law puts a stop to that. New Jersey is setting a model for other states to follow.”
Business groups warned, however, that the law could interfere with programs that help shoppers save money.
New Jersey Business and Industry Association President Michele Siekerka said lawmakers had created a false choice between protecting consumers and preserving operational efficiencies for retailers.
“This law will compromise the very cost-saving programs that consumers rely on, particularly during an affordability crisis,” Siekerka said. “The unintended consequences could very well be the elimination of some loyalty programs, coupons, and other customer-specific discounts due to new limits on consumer data.”
The new law follows other Sherrill administration actions targeting junk fees and algorithmic rent-setting.