California Privacy Panel OKs Surveillance Pricing Bill, Despite Geolocation Concerns
A California bill seeking to limit “surveillance pricing” cleared a key committee at a hearing Tuesday afternoon. The Assembly Privacy Committee voted 10-4 for SB-259, with Republicans opposing. In addition, the committee cleared bills about data brokers and breaches as part of a unanimous vote on a consent agenda. All the bills previously passed in the Senate.
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SB-259 would restrict data about a consumer’s device -- including its current location -- from being used to set prices (see 2506240023). “Corporations are willing to use whatever data is available to them to engage in discriminatory pricing practices,” said the legislation's sponsor, Sen. Aisha Wahab (D). “They are investing in research to determine how data about our devices can be used as proxies for other data points.”
For example, Wahab said, businesses consider the model of a customer’s phone and its location when in use. “Hotel booking sites have been found to show higher prices to travelers in the Bay Area.”
The California Labor Federation expressed support for the bill. “The practice of surveillance pricing is a high-tech assault on working people,” said Ivan Fernandez, a union lobbyist. “Using data such as a person's geolocation or their phone battery to determine how much to upcharge them for a good or service further exacerbates” affordability issues for workers. “Businesses should not have the ability and discretion to alter prices by feeding consumer data to these opaque algorithms.”
However, various industry groups oppose SB-259, including TechNet and state associations for retailers, credit unions, travel agents, national advertisers, insurance companies and other businesses. The California Chamber of Commerce seeks to remove a proposed restriction on using geolocation data. The groups wrote a letter to the committee June 18 to oppose the measure as a "cost driver."
Wahab pushed back against editing how the bill treats geolocation after Assemblymember Lori Wilson (D) sympathized with some opponents’ concerns about restricting the use of location for pricing. “Any definition that narrows the scope of geolocation would have the effect of saying some use of geolocation is acceptable,” Wahab said. “However, we do have a small carve-out to make space for legitimate price differences that arise due to things like regional considerations.” She said she hopes to achieve a “balancing act.”
Assemblymember Chris Ward (D), who has a bill (AB-446) in the Senate that would generally prohibit surveillance pricing, said he sees SB-259 as complementary to his legislation. However, he asked if relying on California's unfair competition law for enforcement is enough. Ward said he expects more discussion about enforcement in the Assembly Judiciary Committee, which will be the next panel to consider SB-259.
Concerning enforcement, Wahab noted that her bill includes $2,500 penalties for each violation and allows multiple entities to enforce the bill, including the attorney general, district attorneys and city prosecutors. However, to protect “mom-and-pop” businesses, there’s “initially … no private right of action.”
Supporting the bill, Assemblymember Liz Ortega (D) said she sees using data to set prices as “modern-day redlining,” which “was not OK then, and it’s not OK today.”
Meanwhile, the committee unanimously approved bills about data brokers and breaches. SB-446, a data breach measure adding specific deadlines to the state’s notification law (see 2504020055), will go next to the Judiciary Committee. The legislation by Sen. Melissa Hurtado (D) would require disclosures to California residents within 30 days of discovery or notification of a breach, plus a notice to the state attorney general within 15 days.
SB-361, which would amend the California Delete Act to require data brokers to disclose more types of personal information in their state registrations (see 2503260047), will go next to the Appropriations Committee. The bill from Sen. Josh Becker (D) adds several categories, including account login credentials, immigration status, sexual orientation and biometric data.