Calif. Legislator Pushes for September Vote on Data-Driven Pricing
California should lead the way in banning data-driven pricing, Assemblymember Chris Ward (D) told Privacy Daily on Thursday.
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State legislators return to session Monday, and Ward is hoping for final passage of his AB-446 by mid-September, he said. The bill passed the Assembly 47-20 on May 12, and the Senate Appropriations Committee is scheduled to consider it at a Monday meeting. The attorney general-enforced bill includes a private right of action that allows consumers to seek injunctive relief against so-called surveillance pricing.
California is considering a separate data-driven pricing bill, SB-259, which passed the Senate 30-9 in May. That legislation would restrict data from a consumer’s device -- including its current location -- from being used to set prices. The proposed law would be enforced under the state’s unfair competition measure, which lets individuals sue. Republicans and business groups were critical of both bills during hearings in July (see 2507150066).
AB-446 and SB-259 are among several California bills that privacy and AI experts are watching (see 2508150016). California fiscal committees have until Aug. 29 to report bills to the floor, and Sept. 12 is the last day for Assembly and Senate chambers to pass bills, according to the legislature’s calendar. Gov. Gavin Newsom (D) will have until Oct. 12 to sign or veto any passed bills.
Industry is worried companies could be “stymied” by technical language in AB-446 that they say could prevent them from offering rewards programs, Ward said. He was drawn to the issue by investigative reporting and details about how companies like airlines are increasingly using consumer data to determine prices individuals are willing to pay.
Ward cited the Biden administration’s work on data-driven pricing at the FTC, which released findings in January. Senate Commerce Committee ranking member Maria Cantwell, D-Wash., is exploring options at the federal level (see 2507170046). New York in May incorporated a data-driven-pricing measure into its budget package. Ward said New York legislators settled for a more “modest” version of what was originally proposed. The New York statute requires companies to “disclose clearly to consumers when a price was set by an algorithm using their personal data, subject to certain exceptions.”
“We’re trying to create the model policy here in California,” said Ward.
David Stauss, a Troutman privacy lawyer, said in an interview that California is “really focused” on algorithm-based pricing. It’s unclear what happens if multiple bills pass and if the two could be interoperable, he added.
The Future of Privacy Forum sees AB-446 as part of a national trend with “lots of bills targeting these kinds of practices in a lot of different states,” said Jordan Francis, FPF policy counsel. Still, the different measures “vary wildly in scope,” he added.
Ward’s bill is broad and includes “some meaty enforcement,” with the attorney general authorized to fine companies up to $12,500 per violation, said Francis. SB-259 is “much more limited” since it focuses on restricting pricing based on location and other data from a consumer’s device.
Consumer Watchdog tech and privacy advocate Justin Kloczko said he expects AB-446 to reach Newsom’s desk. “It’s an issue that is not political and affects everyone,” he said. “Everyone buys things on their phones, online. Everyone has data on them [that is] weaponized. The big question is whether Newsom will sign it.” There’s been a lot of “fearmongering” from the opposition about the impact on consumer discount programs, he added.