Lina Khan, former chair of the Federal Trade Commission has come to occupy this moment. She is currently co-chairing the mayoral transition team for Zohran Mamdani. In this role, she passionately advocates for data-driven state legislation. Through this legislation, Congress has taken an important step in regulating personalized pricing practices that have alarmed consumers and lawmakers alike.
The New York state budget recently introduced new disclosure requirements for businesses that utilize personal data to set varying prices for different customers. These measures make a direct aim at businesses that set prices selectively by using deep data on individual consumers, such as their shopping patterns and consumer behavior. Khan underscored just how important these regulations are. He promised they would be an “absolutely vital” tool for the population of government inventors to help public servants manage the rising, runaway complexity of personalized pricing.
Khan noted that the new law is a huge step in the right direction. He said there’s still tremendous work ahead done to effectively regulate this practice. These requirements encourage transparency in any pricing strategy. Consumers drive the data economy, and these states ensure that consumers are aware of how their personal data impacts the prices they pay.
According to the New York Times, companies will be required to disclose when they use algorithms to set prices. These algorithms exploit customers’ personal data to decide how much customers should pay. This unique requirement is intended to advance the consumers’ ability to feel empowered. Finally, it will provide them guidance about how their shopping behavior can drive the best pricing outcome.
While the introduction of these regulations is certainly welcome, it coincides with a time when personalized pricing is becoming more ubiquitous in sectors beyond transportation. Companies routinely use customer data to tailor their pricing strategies. This practice has led to inequitable differences in costs for like products or services. The new law helps address these issues of unfairness and discrimination in pricing, opening the door to a fairer marketplace.
