Calif. 'Surveillance Pricing' Bill Narrowed to Groceries Only
Only grocery stores need to worry about a California bill on so-called “surveillance pricing” after legislators amended AB-446 on Friday. The Senate Appropriations Committee advanced the amended bill to the floor that day (see 2508290005).
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The severely narrowed bill, if passed, will be “a big missed opportunity to rein in ... bespoke pricing before it becomes widespread,” said George Slover, Center for Democracy & Technology (CDT) general counsel, in an interview Tuesday. “The bill has been transformed from one that protects consumers against bespoke pricing into a bill that essentially blesses grocery store practices and plans.”
Rather than applying to any “person,” as in the previous version of the bill, the amended AB-446 prohibits only “grocery establishment[s]” from using personally identifiable information to set customized prices. Further, the amended legislation clarifies that it’s only concerned with stores using PII to raise prices.
Among other changes, the amendment struck language from the bill that any PII “collected pursuant to” part of the legislation explaining when a grocer isn’t engaging in surveillance pricing “shall be used solely for the purpose of offering or administering the applicable discount, cost-based pricing, or loyalty program, and shall not be used for any other purpose, including, but not limited to, profiling, targeted advertising, or individualized price setting.”
"Bespoke pricing" is “coming,” warned Slover. “The incentives for businesses to use it are just going to be irresistible.”
The CDT official added that it’s too soon to narrow a preventative measure to one industry. “We don't know who's doing it and how much, but we know that the technology is available to make it very easy to do it, and we can't imagine that it is not being done or won't be done soon.”
Slover said he’s more concerned about data-driven pricing at online shops than at physical locations like grocery stores. Online, consumers don’t know what prices others are being offered, whereas at a grocery store, it's relatively easy to see if another shopper is getting a different price, said the CDT official. “They’re not going to be able to put blinders on you when you're in a physical brick and mortar store.”