Ad Industry Opposes Calif. 'Surveillance Pricing' Legislation

While the groups said in a letter they believe "consumers deserve meaningful privacy protections supported by reasonable government policies and responsible industry practices," they argued AB-446 "would significantly restrict businesses from setting prices based on personally identifiable information, thereby chilling the provision of discounts and loyalty programs to Californians."

The advertisers sent the letter Monday to the California Assembly Judiciary Committee. Groups signing it included the Association of National Advertisers, American Advertising Federation and the Digital Advertising Alliance.

Lawmakers failed to consider the value of discounts that are an everyday occurrence when they drafted the legislation, the ad groups said. "For example, when a business uses personal data such as IP addresses or browsing activity to infer consumer preferences and offers a 15% discount pop-up during the consumer’s visit to the brand’s website, this is a legitimate and consumer-friendly use of data," they said. "This interaction would be illegal if AB 446 becomes law, unless the difference from the standard price charged to the consumer is based solely on the price of providing the good or service to that consumer, or a business first provides a detailed written notice of the specific purposes for which the business is setting the discounted price, obtains affirmative consent from the consumer to proceed, and the price is offered to all consumers."

Also, the ad groups said the legislation includes confusing language for businesses and consumers, and would "restrict the use of data for setting prices, with only narrow exceptions for “personally identifiable information” if specific consent and notice requirements are met." And they said the bill is not aligned with the California Consumer Privacy Act and is a broad overreach.

"For consumers, the bill would not lead to more robust consumer protections and could inadvertently lead to higher prices and fewer choices," said the associations. It "would also create barriers for businesses looking to provide access to incentives and deals on their goods and services.

However, when the California Assembly Privacy Committee discussed AB-446 during a livestreamed hearing on March 18, most members supported the legislation's goal to stop so-called “surveillance pricing” (see 2503190011). California Assemblymember Chris Ward (D) introduced the bill in early February, with support from Consumer Watchdog and United Food and Commercial Workers(see 2502070017).